8 proposed policy changes that will impact tax and energy in 2025

The second Trump administration has set deadline goals for finalizing two major pieces of legislation that would significantly impact tax and energy.

May 26, 2025, is the target deadline for the House to pass legislation implementing the goals outlined in the FY 2025 budget reconciliation bill.

July 4, 2025, is the target deadline for the administration’s sweeping tax reform package to pass both the House and Senate.

Both bills propose sweeping changes to tax and energy policy that, if passed, would have wide-ranging ramifications for businesses. If the administration meets its aspirational timelines, many tax and energy provisions could begin impacting businesses retroactively or shortly after passing.

But even if the administration misses its ideal deadlines and the finer details are still under consideration, businesses should plan for legislative action to happen in 2025. The final statutory deadline for FY 2025 budget reconciliation is September 30, 2025. And many of the first Trump administration’s tax and energy policies in the 2017 Tax Cuts and Jobs Act (TCJA) are set to expire at the end of 2025.

Here’s a closer look at eight possible changes in each proposal with tips for how your organization can strategically plan to take advantage of opportunities and safeguard against potential risks:

1. Federal corporate tax rate reductions

Treasury Secretary Scott Bessent recently announced that July 4, 2025, will be the deadline for passing the Trump administration’s tax reform package. While the final bill remains under negotiation, if passed, it would reduce the federal corporate income tax rate from 21% to 15% for U.S. manufacturers to stimulate domestic production. The bill may also include global reductions to the federal corporate income tax rate.

Planning considerations: In anticipation of forthcoming changes, U.S. manufacturers should reassess their corporate tax strategies, adjust deferred tax assets/liabilities and update cash flow and profitability models to reflect the new rate. Broadly, companies should monitor the bill to see if the corporate income tax rate reduction will extend beyond manufacturing.

2. Restoration of accelerated depreciation and 100% expensing rules

In his congressional address on March 4, 2025, President Trump proposed restoring the ability to expense 100% of the cost of eligible capital investments, retroactive to January 20, 2025. This change would likely come as part of the administration’s tax reform package.

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

3. Repeal of certain green energy tax credits

Introduced to the House of Representatives in April 2025, the “Ending Intermittent Energy Subsidies Act” proposes a five-year phaseout of the Production Tax Credit (PTC) and Investment Tax Credit (ITC) for wind and solar projects.

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.

4. Introduction of new fossil fuel incentives

The FY 2025 budget reconciliation bill, which includes many new energy provisions, is expected to advance to the full House for a vote on May 26, 2025, where it’s expected to pass. It includes several new regulatory and fee-based incentives aimed at encouraging domestic energy production, including guaranteed access provisions for oil and gas, geothermal and coal.

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.

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

The Trump administration is proposing to extend provisions from the 2017 Tax Cuts and Jobs Act (TCJA), including maintaining the current tax rates on both GILTI and FDII, to incentivize domestic reinvestment. Without legislative action, deductions are currently set to decrease starting in 2026, which would increase effective tax rates.

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

6. Continued estate and gift tax exemption

If passed, the proposed Death Tax Repeal Act would eliminate the federal estate tax and the generation-skipping transfer (GST) tax. The gift tax would remain in place at a reduced fixed rate of 35%, applying only to lifetime transfers exceeding the exemption amount. The current exemption amount is $13.99 million per individual, or $27.98 million for married couples, but is set to return to $7 million per individual on January 1, 2026. The administration is proposing to extend the higher tax exemption amounts originally established under TCJA and potentially repeal the estate and GST taxes entirely.

Planning considerations: Business owners and high-net-worth individuals should watch this legislation closely. 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.

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

The current administration has proposed significant changes to the R&D credit that would make it more accessible and beneficial for technology, software and manufacturing firms. Proposed changes in the budget resolution that passed the House and are currently with the Senate would reverse the TCJA provision that requires businesses to amortize domestic R&D expenses, instead proposing immediate expensing for 100% of R&D costs. In his May 2025 remarks before the Milken Institute, U.S. Treasury Secretary Scott Bessent said that the administration’s proposed tax legislation would also expand R&D tax credits to new factory construction.

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.

8. 990-T extension requirement for energy credits for nonprofits, tax-exempt entities, governments and tribal organizations

Organizations that installed eligible clean energy systems in 2024 and operate on a calendar-year basis must file IRS Form 990-T — or extend it — by May 15, 2025, to claim direct pay energy credits under the Inflation Reduction Act of 2022, a Biden-era policy. Missing the deadline may permanently forfeit credit eligibility. Fiscal-year organizations would likely not need an extension but should consult IRS guidelines to determine their respective due dates.

Planning considerations: Organizations should review all 2024 energy project activities and immediately file or extend Form 990-T to preserve the right to claim energy-related credits. They should also keep a close eye on how the Trump administration ultimately handles energy credits. A full repeal of the IRA seems unlikely, but there will almost certainly be some changes to energy credits that will affect FY 2026. 

What’s next?

While exact details and timing remain uncertain, changes to tax and energy 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 2025 budget reconciliation and tax reform packages are moving quickly, with key deadline goals set for May 26 and July 4. Prepare now for provisions that may take effect retroactively or before year-end.
• Model financial impacts: Review how proposed changes — like corporate 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.
• Act where deadlines are certain: File or extend Form 990-T by May 15 if eligible for direct pay energy credits and take advantage of current estate tax exemptions that remain in place under current law until January 1, 2026.

How Wipfli can help

At Wipfli, we understand the complexity of deciphering tax credit and broader regulatory landscape 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.