Senate Passes President Trump's "One Big Beautiful Bill"
Earlier today, the U.S. Senate narrowly passed the "One Big Beautiful Bill Act" (OBBBA) by a margin of 51-50, with Vice President JD Vance casting the tie-breaking vote. Republican Senators Thom Tillis (R-NC), Susan Collins (R-ME) and Rand Paul (R-KY) joined Democrats in opposing the sweeping legislative package. The vote followed an all-night amendment marathon. The bill is now back to the House for further debate and a final vote on the revised version.
KEY PROVISIONS
Make Permanent Expiring Tax Cuts
Like the House bill, the Senate bill extends the expiring provisions of the Tax Cuts and Jobs Act (TCJA) and provides additional tax cuts to address President Trump’s campaign promises.
Support for Professional Certification
As in the House version of the bill, the Senate included the critical Freedom to Invest in Tomorrow’s Workforce Act (H.R. 1151/S. 756). This important measure would allow 529 education savings accounts to cover fees and expenses related to obtaining or maintaining recognized post-secondary credentials, including the CERTIFIED FINANCIAL PLANNER® certification. We thank the Senate for recognizing the important role of professional certifications and transforming 529 educational savings plans into career savings plans.
Pass-Through Deductions
Many CFP® professionals are small business owners (or have clients who are) and benefit from the Section 199A pass-through deduction and the pass-through entity tax (PTET) deduction. On Section 199A, the Senate bill makes the 20% deduction permanent, while expanding the phase-in range. The Senate provision increases the $100,000 (joint filers) and $50,000 (all others) amounts to $150,000 and $75,000, respectively, and eases the impact of the limitation by phasing it in over a greater amount of taxable income. We welcome this change, as it would enable small business owners to reinvest in their businesses and contribute to the growth of their communities.
CFP Board was successful in removing a harmful PTET provision that would have limited pass-through entities’ state and local tax (SALT) deductions. As this process continues, we urge the House to adopt the Senate’s provision removing limitations of the SALT deduction.
Casualty and Theft Loss Deduction
The bill includes a limit on the casualty and theft loss deduction, though it modifies it to include state-declared disasters. CFP Board continues to encourage Congress to pass the bipartisan Tax Relief for Victims of Crimes, Scams and Disasters Act (H.R. 3469/S. 1773), which would restore the deduction to provide meaningful relief for victims of financial fraud and scams.
Artificial Intelligence
A provision was removed during the amendment process that would have placed a moratorium on enforcing artificial intelligence (AI) laws and regulations at the state level. CFP Board recently convened an AI Working Group to explore how artificial intelligence is transforming the financial planning ecosystem and the evolving role of human expertise in a tech-powered future. CFP Board will continue to monitor potential legislation that may impact the use of AI in the financial planning profession.
Preservation of Retirement Accounts and Nonprofits
Throughout Congress’ consideration of the legislation, CFP Board has advocated against funding the OBBBA with provisions that would negatively affect retirement plans or nonprofits’ tax-exempt status. We thank both chambers for recognizing the importance of both to everyday Americans and for not including provisions that would have increased taxes on nonprofit organizations or retirement plans.
WHAT’S NEXT
After the Senate passed OBBBA, the House Rules Committee began its hearing to take up the measure, which continues at the time of this announcement. The Committee, which is responsible for determining the procedures and rules for the House floor, will vote on the bill before it goes to the full House floor for debate and a subsequent vote. The House is expected to begin its deliberations tomorrow morning at 9:00 a.m. President Trump has expressed his desire to sign the bill into law by the 4th of July.
We continue to monitor the situation on Capitol Hill.