7 potential tax or energy credit changes in the One Big Beautiful Bill Act passed by the House

On May 22, the House of Representatives passed the One Big Beautiful Bill Act, implementing tax and spending goals outlined by the Trump administration. The House legislation proposes sweeping changes to tax and energy policy that, if agreed to by the Senate, would have wide-ranging ramifications for your business or organization.

The legislation now moves to the Senate, which will almost certainly make changes that will have to be reconciled with the House bill. The White House has targeted July 4, 2025, as the deadline for the massive bill to pass both houses of Congress.

If the administration does meet its aspirational timelines, many tax and energy provisions could begin impacting businesses retroactively or shortly after passing. While the bill could ultimately flounder or be significantly rewritten by the Senate, businesses should still plan for legislative action to happen in 2025.

Here’s a closer look at what is in the new spending bill from a tax and energy perspective. This includes seven possible tax or energy incentive changes, along with tips for how your organization can take advantage of opportunities and safeguard against potential risks.

1. Restoration of accelerated depreciation and 100% expensing rules

In the House bill, businesses can use bonus depreciation to fully expense qualified property acquired and placed in service between January 19, 2025, and December 31, 2029. Additionally, the maximum amount a taxpayer may expense using the section 179 depreciation rules would increase from $1 million to $2.5 million.

Planning considerations: If 100% expensing is ultimately included in the final tax reform package, businesses should strategically plan the timing of capital expenditures, prioritizing investments that qualify for larger or faster deductions while maximizing tax savings through immediate or front-loaded deductions.

2. Repeal of certain green energy tax credits

The House bill speeds up the expiration of the Clean Energy Production Credit (Section 45Y) and the Clean Electricity Investment Credit (Section 48E). The House bill requires that projects begin construction within 60 days of the bill’s enactment and be placed in service by December 31, 2028, to qualify for these credits.

The bill also accelerates the expiration of several clean energy tax credits from their original 2032 end date to December 31, 2025. This includes credits for:

• Residential clean energy installations.
• Energy-efficient home improvements.
• Alternative vehicle refueling property.

Planning considerations: If the proposal gets enacted into law, businesses will need to reassess the financial feasibility of certain renewable energy projects and may need to seek alternative funding or state-level incentives. Additionally, investments in clean energy tax credits will need to be accelerated.

3. Introduction of new fossil fuel incentives

The bill includes provisions that effectively guarantee and expand access to federal lands and resources for the oil, gas, geothermal and coal industries. These measures are designed to promote energy production by streamlining leasing processes, reducing regulatory barriers and offering financial incentives.

Planning considerations: These provisions create opportunities for traditional energy sectors while posing risks for organizations with ESG commitments. Energy firms should take proactive steps to capitalize on regulatory changes while balancing reputational risks; other industries should anticipate potential energy cost shifts.

4. Changes to international tax provisions (GILTI and FDII adjustments)

Under the 2017 Tax Cuts and Jobs Act (TCJA), the effective rate on GLTI was set to increase from 10.5% to 13.125% in 2026 and on FDII from 13.125% to 16.406%, also in 2026. The House bill proposes to extend the 10.5% GLTI rate and the 13.125% FDII rate. Maintaining the current tax rates on both GILTI and FDII will incentivize domestic reinvestment.

Planning considerations: Multinational firms should review international structures, transfer pricing formulas and implement repatriation strategies to maximize benefits.

5. Increased estate and gift tax exemption

Beginning in 2026, the House bill will permanently raise the federal estate, gift and GST exemptions to $15 million per individual and $30 million for married couples with annual adjustments for inflation starting in 2027.

Planning considerations: Business owners and high-net-worth individuals should watch this legislation closely as it moves to the Senate. If it passes, they may want to expedite wealth transfer strategies that take advantage of this expanded exemption window, which could close or be reversed by future legislative action.

6. Revised research and development (R&D) tax credit regulations

Under the TCJA, businesses were required to capitalize and amortize R&D expenditures over five years, starting in 2022. The House bill proposes a temporary reinstatement of immediate expensing for domestic R&D expenditures, reversing the current requirement to amortize these costs over five years.  

Planning considerations: Firms, especially those in the technology, software and manufacturing sectors, should reevaluate qualifying activities and expenditures to maximize benefits under the potential broader eligibility rules. 

7. Significant provisions in the House bill affecting individuals

There are several more major tax provisions in the bill that may affect you as an individual. These include:

• The permanent extensions of Tax Cut and Jobs Act (TCJA) individual income tax rates.
• The qualified business income deduction for pass-through is increased from 20% to 23% and is made permanent.
• Increased standard deductions.
• Permanent extension of the child tax credit at $2,000 per qualifying child entities
• The cap on the state and local tax (SALT) deduction is raised from $10,000 to $40,000 for taxpayers earning $500,000 or less.
• No tax on overtime or tips — subject to an income limitation.
• Health saving accounts (HSA) contribution limits are increased — subject to an income limitation.

What’s next?

While exact details and timing remain uncertain, changes to tax and energy rules and regulations are almost certain to take place in 2025. As these policies unfold, here are a few tips to prepare your business:

• Track legislative milestones closely: The FY 2026 budget reconciliation and tax reform packages are moving quickly, with GOP congressional leaders aiming to send a reconciled bill to the White House by July 4. Prepare now for provisions that may take effect retroactively or before year-end.
• Model financial impacts: Review how proposed changes — like rate cuts, expensing rules and energy credit reforms — could affect your tax position, capital investment plans and cash flow projections.
• Revisit tax and investment strategies: Align your R&D, estate planning and energy investment strategies with current proposals and be prepared to adjust once final legislation is enacted.

How Wipfli can help

At Wipfli, we know how to decipher complex tax credit and regulatory changes. Our tax and energy professionals can help you evaluate investment strategies, maximize available incentives and adapt to regulatory changes as they unfold. Contact us to learn more, and for continuous updates on administration policies impacting the tax and energy sector, follow our policy updates page.