With the recent signing of Public Law No. 119-21 — aka the One Big Beautiful Bill (OBBB) — a number of provisions from the 2017 Tax Cuts and Jobs Act (TCJA) that were set to change or sunset at the end of 2025, were extended. Here’s an overview of several topics of interest to bank leadership.
Business Tax Reforms
- Exclusion of 25 percent of interest received by a qualified lender on any qualified real estate loan effective for original debt incurred in tax years ending after July 4
- Restoration of 100 percent bonus depreciation in the year the asset is placed into service for most business assets placed into service after Jan. 19, 2025, replacing the phased-down depreciation that began in
- Reforms to low-income housing tax credits (LIHTC) make it easier for more projects to qualify for the 4 percent tax credit and make permanent a 12 percent annual increase for certain LIHTC
- Corporations may only deduct charitable contributions that exceed 1 percent of the corporation’s taxable income, up to a cap of 10 percent of taxable income. Contributions above 10 percent of taxable income may be carried forward for five years.
- Beginning 1, 2026, employers will no longer be able to deduct certain meal- related expenses, such as snacks, coffee, and meals provided on business premises for the convenience of the employer.
CFPB (Consumer Financial Protection Bureau)
In line with the Trump Administration’s overall stance on regulation, OBBBA reduces the amount of funding the CFPB can request from the Federal Reserve from 12 percent to 6.5 percent. For FY2025, the funding cap is estimated to be $446 million — 46 percent less than the $823 million it would have been under the 2010
Dodd-Frank Act’s formula. While this might limit CFPB rulemaking and enforcement activities, state regulator efforts and private litigation could close any gaps.
Student Loan Programs
OBBBA ends the Graduate PLUS Loan program but introduces the Parent PLUS Loan program, as well as annual and aggregate borrowing limits. These changes may push borrowers to seek alternative, potentially higher-cost financing options.
It also moves borrowers into income-based repayment plans and sets stricter eligibility and accounting standards for educational institutions.
Agriculture and Farming
Significant changes to U.S. agricultural industry policy include raising key crop reference prices and enhancing safety net programs. Other changes include the allocation of 30 million new base acres,
allowing more farmers to qualify for federal support; increases in payment limits for commodity programs; more financial assistance for dairy farmers; and enhanced premium support for crop insurance.
Trump Accounts
These new tax-advantage savings accounts for eligible minors are capped at $5,000 in contributions annually and feature strict investment and distribution requirements. Children born between Jan. 1, 2025 and Dec. 31, 2028, will each receive an initial $1,000 contribution to their Trump Account from the federal government.
For guidance navigating these and other reforms that will impact your financial institution, as well your personal and business clients, please contact Lisa M. Newland, CPA, CFE, at 239.992.6211 or [email protected].