High-income earners (>$217,000)
For
taxes filed in 2026, households making between $217,000 and $318,000 would see their after-tax income raise 2.6 percent, a tax break of about $5,400. For Americans making $318,000 to $460,000 — in the 90th to 95th percentile — that cut would be about $8,900, or a 3.1 percent increase to their after-tax income.
Those making between $460,000 and $1.1 million would receive the biggest break: a $21,000 change, increasing their after-tax income by 4.4 percent.
The top 1 percent and the top 0.1 percent — households making more than $1.1 million or $5 million — would see their after-tax incomes increase 3.5 percent and 3.2 percent, respectively.
Middle-income earners ($50,000-$200,000)
The tax breaks for the rest of Americans are far less substantial,
according to the center’s estimates.
Households making between $100,000 and $200,000 a year would see their after-tax income increase by 2.5 percent, about a $3,000 tax break. For those making between $75,000 and $100,000, the tax cut as a percentage of income is similar — at about $1,700 or 2.3 percent.
Americans earning between $50,000 and $75,000 will have a $1,000 tax break.
Low-income earners (<$50,000)
For those making between $40,000 and $50,000, that cut will be about $630. Those are after-tax boosts of 1.9 percent and 1.5 percent, respectively.
Those in the bottom quintile of incomes, making below $34,600 a year, would see their taxes decrease by about $150, or a 0.8 percent increase in their after-tax income.
However, benefits that low-income Americans could see in tax breaks could be offset by the bill’s sweeping cuts to Medicaid and food stamps.
Federal Medicaid spending is
estimated to decrease by about $1 trillion, resulting in about 12 million low-income Americans losing their health insurance by 2034, according to the nonpartisan Congressional Budget Office.
The bill also
includes work requirements for Medicaid and for Supplemental Nutrition Assistance Program benefits, also known as food stamps, which could disenroll millions from both programs.
Other new tax cuts
Many of the bill’s tax deductions will start in 2025, and some of them will be permanent. That
includes a permanent increase in the child tax credit to $2,200 and an increase in the standard deduction by $750.
Other new tax cuts, especially those core to Trump’s campaign promises, are set to expire in a couple of years. A new $6,000 deduction for Americans over 65 will last only through 2028. A $25,000 deduction designed to eliminate taxes on tips will also only last for three years. The same goes for another $12,500 deduction meant to curb taxes on overtime.
The amount that households can deduct in state and local taxes on their federal returns, known as the SALT cap, will also increase to $40,000. Previously capped at $10,000, SALT deductions were a major sticking point among House Republicans during the first rounds of negotiations on the bill in May.
