U.S. Senate Finance Committee Reveals Major Tax Bill that Differs Significantly from Version Passed in U.S. House
The U.S. Senate Finance Committee released its highly-anticipated tax legislative package that differs significantly from the version passed in the U.S. House. Below is a comparison of the key provisions relevant to independent auto repairers:
| House | Senate | |
| Section 199A Deduction | Makes it permanent and increases it from 20% to 23%. | Makes it permanent and keeps it at 20%. |
| Top Marginal Income Tax Rate | Permanently caps the top marginal income tax rate at 37 percent for all income earned over $609,350. | Permanently caps the top marginal income tax rate at 37 percent for all income earned over $609,350. |
| Tax Credits for Consumer EV Purchases | Almost completely eliminated. | Almost completely eliminated. |
| EV Production Incentives | Cut by roughly 50%. | Fewer cuts and slower phaseout periods than the House version. |
| Bonus Depreciation | Allows small businesses to deduct 100 percent of investments in certain machinery and equipment for the tax year of the expenditure, thereby avoiding depreciation. This provision expires at the end of 2029. | Permanently allows small businesses to deduct 100 percent of investments in certain machinery and equipment for the tax year of the expenditure, thereby avoiding depreciation. |
| Gift and Estate Tax | Increases the threshold at which estates and lifetime gifts are taxed by $1 million. | Increases the threshold at which estates and lifetime gifts are taxed by $1 million. |
| Taxes on Overtime Pay | Eliminates taxes employees making less than $160,000 must pay on overtime pay for 2025-28 tax years. | Deductions for overtime pay capped at $12,500 for 2025-28 tax years for employees making less than $150,000. |
| Child Tax Credit | Makes the $2,000 credit permanent and makes it $2,500 for 2025-2028 tax years. | Increases it to $2,200 and makes it permanent. |
| Car Loans | Car owners who make less than $100,000/year can deduct up to $10,000 in car loan interest payments for 2025-28 tax years. | New car owners who make less than $100,000/year can deduct up to $10,000 in car loan interest payments for 2025-28 tax years for vehicles assembled in the U.S. |
| Standard Deduction | Increases it by $1,000 for single filers and $2,000 for joint filers. | Increases it by $1,000 for single filers and $2,000 for joint filers. |
| Paid Leave Tax Credit | Makes permanent the tax credit for small businesses that provide Paid Family and Medical Leave in states where businesses are not required to provide such leave. | Makes permanent the tax credit for small businesses that provide Paid Family and Medical Leave and expands it to employees in all states. |
| Childcare Tax Credit | Makes permanent the current up-to-$150,000 tax credit on up to 25% of the childcare support provided to employees. | Permanently makes the credit up to $500,000 on up to 40% of the childcare support provided to employees ($600,000 and 50% for small businesses). |
| SALT Deduction (Individuals) | Increases the cap from $10,000 to $40,000 for married couples with less than $500,000 in income. | Keeps cap at $10,000. |
| SALT Deduction (Businesses) | Prevents businesses from using SALT deductions. | Allows businesses to use SALT deductions on a limited basis. |