The recent Congressional enactment of PL 119-21 in July 2025 has provided new stability for our Federal tax laws. Tax planning has been in an unwelcome state of flux since the adoption of the Jobs and Tax Cut Act of 2017. Taxpayers and professional advisors alike were vexed by the uncertainty of the TCJA’s proposed “sunset” for estate tax exemption amounts, income tax brackets, and other important tax provisions affecting individuals, trusts, estates, and businesses. The new Act provides stability to the TCJA’s terms by making permanent to TCJA’s income tax brackets, stabilizing the estate tax exemption provisions, and making a number of other changes to tax laws, health care accessibility, and miscellaneous other laws of interest to all taxpayers.
Federal Estate Tax is stabilized. Gone is the proposed “sunset” of federal estate tax exemption amount increases put into place in 2017. The new exemption amount is increased to $15 million per person for 2025, adjusted annually for inflation as has been the practice in past years. The practice of “portability” of the exemption amount continues, so that a married couple can now plan to exempt a total of 30 million dollars after their passing, and the exemption amount of the first spouse can be transferred to the surviving spouse as needed, as long as a 706 estate tax return is properly filed to capture the exemption amount. The generation-skipping tax exemption amount continues to track the same number as the estate tax exemption amount, so exemption from such tax on gifts or bequests to grandchildren are also increased to $15 / 30 million dollars for properly documented gifts.
Income tax brackets are continued. The increased income tax brackets set up by the JTCA in 2017 are now made permanent. For married-filing-jointly taxpayers, the highest rate of 37% is achieved at income of $751,600. For estates, the 37% rate is reached at income of $15,650.
Child tax credits increased. The child tax credit, set to end in 2025, has been made permanent and increased to $2,400 per qualified child, adjusted annually for inflation. Up to $1,400 of this amount can take the form of a tax refund of cash to the taxpayer. Also new are tax-exempt savings accounts for children with tax-deferral benefits similar to IRAs; the government will even fund these accounts with up to $1,000 for children born between 2025 and 2028.
Other changes. PL 119-21 introduces a number of other revisions to the tax law that are worthy of notice. (1) Non-itemizing taxpayers can now claim a deduction for charitable donations up to $2,000 (married filing jointly) beginning for tax year 2026. This is for cash gifts, to qualified charities only. (2) The corporate tax rate is made permanent at 21%, as is 100% bonus depreciation; these are only two of many business tax changes in the new Law. (3) Additional new deductions are allowed related to tips; car loan interest; overtime; and an additional exemption amount for seniors. All of these deductions come with additional requirements and limitations.
Tim Bupp has practiced for twenty-five years with CGA Law Firm in estate planning, estate administration, and elder law. Tim is an Accredited Estate Planner (AEP) by the American Association of Estate Planning Councils and a Certified Elder Law Attorney (CELA) by the National Association of Elder Law Attorneys. He is certified in Estate Planning and in Pension Law Planning by the Temple University Beasley School of Law, from which he also holds a Master of Laws degree in Tax Law. He also holds a JD from the Pennsylvania State University Dickinson School of Law, an MBA from York College of Pennsylvania, and a Bachelor of Science degree from Penn State. Tim is a shareholder at CGA Law Firm, where he chairs the Estate Law Group. Reach Tim at tbupp@cgalaw.com or 717.848.4900.
