Find Out Which Tax Provisions Are Expiring in 2025

The Tax Cuts and Jobs Act (TCJA) overhauled the American tax code in late 2017, and those changes affected taxpayers in different ways. Whether it was a positive or negative change, several components of the TCJA will expire at the end of next year.

We’re going to review the TCJA tax provisions that are expiring on December 31, 2025. Renewing them would require Congress passing a bill and the President signing it. If you see one you don’t want to lose, you could call your congressional representatives to let them know.

Child Tax Credits

The TCJA and temporary programming that ran during the initial years of the pandemic increased child tax credits by multiples of 100%. Without further legislation, they may go back to their 2017 levels.

Child Tax Credit

The Tax Cuts and Jobs Act doubled the value of the Child Tax Credit. It also increased the refundable portion (the Additional Child Tax Credit) by 40%. For the moment, these increases will expire at the end of 2025.

A bill that improves upon the refundable portion of the credit recently passed the House and is awaiting a vote in the Senate. If the Tax Relief for American Families and Workers Act of 2024 passes into law, it would make the full Child Tax Credit refundable by 2025, with incremental increases for the tax years 2023 and 2024.

But it doesn’t do anything to extend these increases beyond the 2025 tax year. That would still require a further act of Congress.

Credit for Other Dependents

If you have a dependent over the age of 17 or a child who doesn’t have a Social Security number, you can claim a $500 credit for them using the Child Tax Credit worksheet. You have to fully provide financially for the person in order for this credit to apply. Situations where this might apply is if you have a college student under the age of 24 or if you are the parent of a disabled adult for whom you provide everything.

Currently, this credit is set to expire at the end of 2025.

ABLE Account Changes

Several changes to ABLE accounts were included in the The Tax Cuts and Jobs Act. The continuation of these would allow disabled people to build their savings without the risk of losing disability benefits or health care access.

ABLE to Work

Annual contributions to ABLE accounts are capped at the annual gift tax exemption amount, which is $18,000 in 2024. However, ABLE to Work made it so disabled individuals who are working and contributing to their ABLE account have a max contribution level of the annual gift tax exemption plus 100% of the federal poverty level for a one-person household.

In 2024, that means ABLE to Work allows disabled people to save an additional $15,060 per year if they live in the contiguous states, for a grand total of $33,060. (Assuming they earn at least $15,060 in 2024.)

Disabled individuals can’t save in a traditional deposit account past $2,000 without losing disability benefits.

Without an extension, working disabled adults will only be able to save the annual gift tax exemption amount per year without the extra allowance.

ABLE application to the Saver’s Credit

If you are disabled and contribute to your own ABLE account throughout the year, your contributions make you eligible for the Saver’s Credit. The non-refundable Saver’s Credit allows you to reduce your tax burden by up to 10%, 20% or 50% of your contribution amount depending on your income. This provision is set to expire on December 31, 2025.

529 to ABLE Account rollovers

For right now, you can roll a 529 over to an ABLE account, and the rollover will not be taxable as long as the amount doesn’t exceed that year’s contribution limits.

There are several advantages to rolling over a 529 account to an ABLE account. First, if your child doesn’t go to college, funds in an ABLE account qualify for any number of lifestyle withdrawals – the limitations aren’t nearly as strict as those of a 529 account. If your child does go to college, ABLE account funds don’t hurt you on the FAFSA, while 529 balances potentially have a small impact on the financial aid offered.

Unless something changes between now and then, these tax-free rollovers will no longer be allowed after 2025.

Standard and Itemized Deduction Changes

One of the most universal line items that changed with the TCJA was the standard deduction. The change was dramatic and had an impact on other line items further down your return.

Standard Deductions

Standard deductions nearly doubled under the TCJA. Itemizing deductions then made a lot less sense for the vast majority of Americans. If nothing happens between now and December 31, 2025, the base deductions will get slashed by almost 50%. (The deduction accounts for the base + inflation.) If this comes to pass, you may want to start holding onto your receipts again in 2026, as itemized deductions may be bigger than the standard deduction again, depending on your financial situation.

Whatever does or doesn’t happen with the standard deduction between now and the end of 2025, we might see it impact a myriad of other deductions, credits and exemptions, too. Let’s explore the ones most likely to hinge on the standard deduction.

Personal Exemptions

In part because the standard deduction became so large under the Tax Cuts and Jobs Act, personal exemptions disappeared. You used to be able to claim $4,150 + inflation for yourself and each dependent you were claiming on your return. This reduced your taxable income, and ended up serving essentially the same function as a deduction.

Personal exemptions haven’t been a thing since the TCJA passed, but unless there’s legislative intervention between now and then, they’ll make an appearance in the 2026 tax year.

Moving Expense Deduction

Everyone used to be able to claim moving expenses they paid out of their own pocket as a deduction – assuming your move pertained to your employment. It made sense to claim this deduction back when standard deductions were lower.

Under the TCJA, you can’t claim this deduction – even if claiming it would put your itemized deductions above that of the high TCJA standard deductions. The only exception is if you’re in the Armed Forces.

If left untouched, everyone would be able to claim this deduction again starting in 2026.

Moving Reimbursement Exclusion

Prior to the TCJA, if your employer paid for you to move, you weren’t taxed on that sum as income. Under the TCJA, unless you’re in the military, you have to pay taxes on the expenses your employer covered as compensation.

Without further intervention, this practice will stop after December 2025.

Charitable Contributions Deduction

Prior to the TCJA, you could only deduct charitable donations of up to 50% of your adjusted gross income (AGI). The TCJA bumped that up to 60% of your AGI. It also made the standard deduction dramatically higher, so unless you’re making (and donating) a ton of money, you probably don’t claim this deduction anymore.

If nothing changes between now and the end of 2025, the charitable contributions deduction will once again be capped at 50% of your AGI.

State and Local Tax (SALT) Deduction

The SALT deduction used to be uncapped and included taxes paid on foreign real estate. The TCJA changed that for individuals, putting a cap of $10,000 on this deduction and excluding taxes paid on foreign real estate. The $10,000 cap doesn’t apply if you’re paying taxes necessary to run a business.

If this provision expired, the cap would disappear entirely and foreign real estate taxes would once again be fair game.

Mortgage Interest Deduction

Before the Tax Cuts and Jobs Act, you could deduct the mortgage interest you paid throughout the year on the first $1 million of mortgage debt. If you bought your home before December 15, 2017, that rule still applies (though you can only deduct the interest on the first $500,000 if you’re married filing separately.)

However, if you took out a mortgage after December 15, 2017, for now you can only claim the interest on the first $750,000 of mortgage debt (or $375,000 if you’re married filing separately.) The increase of the standard deduction also meant the number of claims on this deduction went down.

Should nothing change between now and the end of 2025, everyone will be able to claim the deduction on interest paid on the first $1 million of mortgage debt.

Personal Casualty and Theft Loss Deduction

Under the TCJA, you can only claim a deduction for personal casualty and theft loss if the loss occurred in an event that the President declares a Section 401 disaster. If the provision is allowed to expire, that requirement will disappear.

Gambling Deductions

The TCJA expanded the gambling losses you could claim as deductions on your taxes. To claim a deduction like this, you must have more gambling winnings than losses on your tax return.

After 2025, recreational gamblers will no longer be able to deduct ‘expenses incurred in carrying on the gambling activity.’ Professional gamblers will only be allowed to deduct nonwager expenses.

Itemized Deduction for Miscellaneous Expenses

The TCJA allowed the ability to deduct unreimbursed employee expenses for people in following professions (or those who incurred unreimbursed employment expenses because of a disability,).

• Educator
• Armed Forces reservist
• Qualified performing artist
• Fee-based state or local government official

A list of other miscellaneous expenses no longer counted toward itemized deductions, like tax preparation fees, investment fees and money you spent on your hobbies.

Those could all make a reappearance, with unreimbursed employee expenses opening back up to everyone, too – assuming no further legislation is passed between now and the sunset date.

Itemized Deduction Limitation

Currently, if you do have enough expenses to justify giving up the standard deduction, there is no limit on the total itemized deductions you can claim. That’s set to sunset on December 31, 2025, though.

After that, once you hit a certain income level, you’ll start seeing a reduction in how much you can claim. For instance, if the AGI limit was hypothetically $450,000, but your AGI is $500,000, you’d have to subtract 3% of $50,000 (or $1,500) from your itemized deduction.

Personal Income Tax Rates

Tax tables themselves changed under the Tax Cuts and Jobs Act, too. Plus, the alternative minimum tax experienced significant transformation.

Marginal Tax Rates

Marginal tax rates will go up at most income levels if certain provisions in the TCJA aren’t renewed. When we talk about tax rates, it’s important to note that we use a progressive tax system. That means if you fall in the 24% tax bracket you won’t pay 24% in income taxes on all of your income. You’d pay 10% on the first $11,000, 12% on the next $33,725, 22% on the next $50,650, and 24% on any remaining taxable income.

Both income bands and marginal tax rates would change without a renewal of current rates. Income bands are a little harder to predict as they’d involve inflation calculations into the future, but the tax rates themselves are set in stone:

*Will apply to a new taxable income band.

Alternative Minimum Tax

The TCJA significantly reduced the number of people subject to the alternative minimum tax. This reduction applied primarily to middle-income and upper-middle-income households. If no new legislation is introduced, it will revert back, affecting 6.7 million taxpayers in 2026.

Miscellaneous personal income tax considerations

These changes to personal income tax considerations don’t affect quite as wide a number of people, but if they do affect you, then you’ll likely notice their impact. Here are the miscellaneous changes you can expect to see at the end of next year.

Bicycle Commuter Reimbursements

If you work for a company that offers you reimbursements for bicycle commuting expenses, you’re probably aware that right now these reimbursements are taxed as income. When this provision of the TCJA sunsets at the end of 2025, up to $20 per month will be sheltered from this taxation. That means if your reimbursement was $30 per month, only $10 of it would count as taxable income.

Removal of the Sinai Peninsula as a Combat Zone

There are special tax rules for combat pay for people in the military. Usually, what’s determined a ‘combat zone’ or not is decided by Executive Order (from the Commander in Chief.) But the TCJA statutorily declared the Sinai Peninsula a combat zone as an act of Congress.

This provision is set to end on December 31, 2025. Unless it’s re-legislated or the President declares the Sinai Peninsula a combat zone through an Executive Order, there is the potential of losing certain tax benefits if you’ve provided services in the region.

Estate and gift tax exclusion

Under the Tax Cuts and Jobs Act, the estate and gift tax exclusion is $10 million + inflation. In 2024, that adds up to $13,610,000. If the estate and gift tax exclusion portion of the TCJA is not extended, it will revert to a base of $5 million + inflation, subjecting a larger portion of inheritances to taxes.

Business Tax Changes

The business taxation changes that could disappear starting with the 2026 tax season are likely to affect small businesses, real estate businesses or businesses in other industries that typically operate as pass-through entities, and businesses that offer their employees certain benefits.

Qualified Business Income Deduction

The TCJA allowed pass-through businesses – like LLCs, sole proprietorships and certain S Corps – to claim a deduction of 20% of their qualified business income. This in turn lowers the individual’s taxable income. Without further legislation, this deduction will disappear starting January 1, 2026.

Employer credit for paid family and medical leave

The number of businesses that offer paid parental leave has been increasing. That may in part be due to the impacts of the pandemic on the labor market. But it may also be in part due to a tax credit the TCJA gave employers.

If the employer pays a wage of at least 50% of normal wages when an employee is on family or medical leave, the employer can claim a credit worth 12.5% of the wages paid. The credit keeps going up – all the way up to 25% of the wages paid if you offer 100% of the employee’s normal compensation.

This credit will disappear if it’s not included in future legislation between now and 2026 tax filings.

Pittsburgh-based writer Brynne Conroy is the founder of the Femme Frugality blog and the author of “The Feminist Financial Handbook.” She is a regular contributor to The Penny Hoarder.