President Donald Trump’s “One Big Beautiful Bill” (OBBBA), which includes sweeping changes to the U.S. tax code, is expected to be signed into law on July 4, 2025, around 5 PM. This ceremonial signing will officially make the legislation binding, setting in motion various tax, welfare, and immigration reforms. The bill passed narrowly through the Senate with a tie-breaking vote by Vice President J.D. Vance.
The core tax provisions—such as the extension of the 2017 Tax Cuts and Jobs Act, tax exemption on tips and overtime income (subject to caps and income thresholds), and a permanent increase in the standard deduction—are set to take effect for taxable years beginning after December 31, 2024. In practice, this means these changes will apply to income earned starting January 1, 2025, and will be reflected in the tax returns filed in 2026.
Other major provisions in the bill have staggered rollout dates. For example, the increase in the SALT (State and Local Tax) deduction cap to $40,000 takes effect immediately upon the bill’s signing and will remain for five years before reverting to the prior cap of $10,000. Benefits like the expanded child tax credit, which will range between $2,200 and $2,500 per child depending on family size and income, and the new “Trump Accounts” that provide a $1,000 federal investment for each newborn, will begin rollout sometime in 2025 and continue through 2028.
Work requirements for Medicaid recipients, requiring at least 80 hours per month, are scheduled to begin on December 31, 2026. Similarly, new cost-sharing mandates for states with high error rates in SNAP (food assistance) programs will start in 2028. These welfare reforms reflect the administration’s push for greater accountability and reduced federal spending.
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On the environmental front, the bill eliminates several clean-energy tax incentives. Tax credits for electric vehicles and renewables will be phased out within 60 days of the bill becoming law, while nuclear energy credits will be preserved. This marks a significant policy shift from the previous administration’s emphasis on green energy.
Finally, funding for national security—such as increases in ICE staffing, Border Patrol enhancements, and military spending—takes effect immediately, although actual deployments and disbursements are aligned with the 2026 fiscal year budget cycle.
In summary, while the bill becomes law on July 4, 2025, most of its financial implications will be felt starting in the 2025 tax year, with welfare and energy-related changes unfolding over the next three years.
