By Andy Sullivan
WASHINGTON (Reuters) -U.S. Senate Republicans have unveiled their version of President Donald Trump’s sweeping tax-cut and spending bill that is broadly similar to the legislation that narrowly passed the House of Representatives last month.
The Senate still must debate the bill and pass it, and then the two Republican-controlled chambers will have to resolve their differences before they can send it to Trump to sign into law. Here are some of the biggest differences between the two bills:
TEMPORARY VS. PERMANENT TAX BREAKS
The House bill, which would add $2.8 trillion to the nation’s debt over the next decade according to the nonpartisan Congressional Budget Office, includes an array of tax cuts, but many of them would expire after a few years. The Senate version would make some of those tax breaks permanent.
TAX CURRENT HOUSE VERSION SENATE
BREAK LAW VERSION
Child $2,000 Raised to Permanent
tax per $2,500 increase to
credit child, through 2028, $2,200,
drops to then reverts indexed to
$1,000 to $2,000, inflation.
in 2026 indexed for
inflation.
Standard $30,000 Temporary Permanent
deductio for increase to increase to
n married $32,000 $32,000
couple, through 2028, starting in
drops by back to 2026
about $30,000 after
half in that.
2026
Business Amortize 100% 100%
research d over 5 expensing for expensing for
and years, domestic domestic
developm 15 years research research
ent for through 2029, permanently
costs foreign then reverts
research
Bonus 40% this 100% through 100%
deprecia year, 2029, then permanently
tion for 20% in phases out
business 2026, 0%
equipmen after
t that
purchase
s
Business Up to Expands this Expands this
interest 30% of break to break to
expenses earnings include include
before depreciation EBITDA
interest and permanently
and amortization
taxes (EBITDA)
(EBIT) through 2029
STATE AND LOCAL TAX DEDUCTION
The House version would increase the maximum deduction for state and local tax payments from $10,000 to $40,400 starting in 2026. The Senate version would keep the $10,000 SALT cap in place.
DEDUCTION FOR OLDER AMERICANS
The House would provide a deduction of up to $4,000 for people over 65; the Senate would provide a $6,000 deduction. Both would end after 2028.
NO TAX ON TIPS
Both chambers would provide a deduction for tipped income through 2028. The Senate version caps that deduction at $25,000 while the House does not include a cap.
RETALIATORY (SECTION 899) TAX
Both the House and Senate would allow the U.S. to impose new taxes on residents, businesses and other entities from countries that are found to impose “unfair foreign taxes.”
The Senate version would take effect in 2027, one year after the House version would take effect.
CLEAN ENERGY PROJECTS
Both the House and Senate versions would roll back clean-energy incentives created by President Joe Biden’s 2022 Inflation Reduction Act, but they differ in their timing.
For example, under the House bill, a tax credit for wind, solar and other clean energy projects would not apply to any project that begins operation after 2028. Projects that began construction after 60 days after the bill became law also would not qualify, even if they were completed before the end of 2028.
The Senate bill, by contrast, would phase out that credit for wind and solar projects through 2027, and phase it out starting in 2033 for hydro, nuclear and geothermal projects.
MEDICAID
Both the House and the Senate would clamp down on “provider taxes,” which states levy on Medicaid providers as a way to boost federal funding. The Senate version adds specific language that closes loopholes and prevents states from designing workarounds, which is absent in the House bill.
SPORTS TEAMS
The House bill would cut a tax break for sports-team owners in half. The Senate version does not include that language.
DEBT CEILING
The House bill would raise the U.S. debt ceiling, currently at $36 trillion, by $4 trillion. The Senate bill would raise it by $5 trillion. Congress must act on this by sometime this summer or risk triggering a default on the nation’s $36.2 trillion in debt.
COURTS
Both the House and Senate bills seek to limit U.S. judges’ power to block federal policies nationwide, a key tool for the federal court system as it considers dozens of challenges to the Trump administration’s activities.
The House version would curtail the ability of judges to enforce orders holding administration officials in contempt if they violate these injunctions. The Senate version would limit their ability to issue those injunctions in the first place if the party challenging the government does not post a bond to cover the government’s costs if the ruling is later overturned.
(Reporting by Andy Sullivan; Editing by Scott Malone and Nick Zieminski)
