Find the List of Middle-Income Earners Who Benefit from the Big Beautiful Bill

Tax Cuts for Middle-Income Workers

The One Big Beautiful Bill Act provides significant tax relief for middle-income earners.
Individuals earning between $30,000 and $80,000 annually receive a 15% reduction in federal income taxes.
This change is designed to increase take-home pay and stimulate economic growth.
For example, a family of four earning the median income of $80,610 is projected to see an increase in take-home pay of over $10,000 per year.

Expanded Child Tax Credit

The bill increases the Child Tax Credit from $2,000 to $2,200 per child, with the amount indexed to inflation.
This enhancement aims to provide additional financial support to families with children.
However, the refundable portion of the credit remains unchanged, which may limit benefits for lower-income households.
Families should review eligibility to maximize their claim.

Tax-Free Overtime and Tips

Workers earning less than $150,000 annually can now deduct up to $25,000 each in tips and overtime pay from their taxable income.
This provision is particularly beneficial for service industry employees and others who rely on variable income.
The deduction is set to expire in 2028.
Workers should track qualifying income to ensure they claim the full deduction.

Auto Loan Interest Deduction

The bill introduces a deduction of up to $10,000 per year for interest paid on auto loans for vehicles assembled in the United States.
This deduction phases out for individuals with incomes over $100,000 and couples over $200,000.
It aims to support both consumers and domestic auto manufacturers.
Car buyers should confirm vehicle eligibility before applying the deduction.

Increased SALT Deduction Cap

The State and Local Tax (SALT) deduction cap has been raised to $40,000 for married couples earning up to $500,000, with a phase-out for higher earners.
This change provides significant relief for taxpayers in high-tax states.
The increased cap is effective through 2029.
Taxpayers should consult advisors to understand how the higher cap affects their deductions.

Senior Tax Relief

Seniors aged 65 and older with incomes under $75,000 (single) or $150,000 (married) can deduct up to $6,000 ($12,000 for couples) of their Social Security income.
This provision aims to reduce the tax burden on retirees.
The deduction is temporary and set to expire in 2028.
Seniors should consider timing withdrawals to benefit fully.

Trump Accounts for Newborns

Children born between January 1, 2025, and December 31, 2028, are eligible for a $1,000 investment account funded by the federal government.
Parents can contribute up to $5,000 annually, with the funds growing tax-deferred.
The accounts are intended to support future expenses like education or homeownership.
Families should plan contributions early to maximize growth.

Impact on Healthcare and Social Programs

While the bill offers tax benefits, it also includes significant cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
These cuts may disproportionately affect low-income households, potentially offsetting the benefits received from tax relief.
The bill imposes work requirements on Medicaid recipients and reduces funding for SNAP, which could lead to millions losing access to healthcare and food assistance.
Lawmakers are debating ways to balance tax cuts with social support.

Overall Economic Impact

The Congressional Budget Office projects that the bill will increase the federal deficit by $3.4 trillion over the next decade.
While proponents argue that the tax cuts will stimulate economic growth, critics express concern over the long-term fiscal implications.
The bill’s impact on income inequality and public services remains a topic of debate.
Analysts are monitoring the effects closely as implementation continues.