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When would Trump’s tax and spending bill go into effect?

Last updated: July 3, 2025 2:01 pm
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When would Trump’s tax and spending bill go into effect?
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Contents
MedicaidTax ratesSALTTips and overtimeChild Tax CreditSocial Security tax deduction

When the GOP’s tax and spending bill goes into effect isn’t an easy question to answer.

The nearly 900-page bill covers a wide swath of government spending beyond the high-profile topics like Medicaid and tax cuts, and provisions take effect at different times.

Republicans are working to get the bill approved in the House so it can get to President Donald Trump’s desk by July 4.

Here are some of the key start dates and end dates outlined in the bill:

Medicaid

Millions of Americans are expected to lose Medicaid coverage due to a drop in Medicaid payments to states and an increase in paperwork tied to new work requirements for low-income and disabled people who qualify.

But when exactly people will lose coverage remains unclear and likely to vary by state.

Nationwide Medicaid work requirements take effect Jan. 1, 2027, shortly after the mid-term elections decide which party controls Congress.

The legislation requires “able-bodied” Medicaid recipients to work 80 hours a month or qualify for an exemption, such as being a student, caregiver or having a disability. The work requirement applies to parents of children older than 13.

Tax rates

The bill permanently extends the tax cuts introduced in the 2017 Tax Cuts and Jobs Act, which were set to expire this year. There should be no disruption in their application if the bill is signed.

Most Americans are expected to continue to see tax cuts, with high-income households – which tend to pay more taxes – seeing the largest gains.

More: Will Trump’s big tax bill help or hurt you? Why it could depend on your income

SALT

The cap on the federal deduction for state and local taxes, known as SALT, would be raised to $40,000 starting in 2025, meaning people can deduct from their federal taxes as much as $40,000 of what they pay to their state and community.

That benefit starts to phase out for people who earn more than $500,000. In 2030 the increased deduction ends and the $40,000 limit would revert to $10,000.

Tips and overtime

No tax on tips or overtime are promises Trump made on the campaign trail when he was running for a second term.

Workers will be able to deduct up to $25,000 in tips and up to $25,000 in overtime, but the tax law change is temporary and ends Dec. 31, 2028, right before he leaves office.

Child Tax Credit

Under current law, the maximum child tax credit is $2,000, which would have reverted to $1,000 after 2025.

The GOP’s spending bill would permanently raise that maximum credit to $2,200 starting in 2025 and tie the amount to inflation going forward. There is no end date to the increase.

Members of the House sit on the steps outside the U.S. Capitol during the procedural vote on the One Big Beautiful Bill Act on July 03, 2025 in Washington, DC. Speaker of the House Mike Johnson (R-LA), President Donald Trump and other Republicans are scrambling to gather enough support to begin debate on Trump's sweeping tax and spending bill.
Members of the House sit on the steps outside the U.S. Capitol during the procedural vote on the One Big Beautiful Bill Act on July 03, 2025 in Washington, DC. Speaker of the House Mike Johnson (R-LA), President Donald Trump and other Republicans are scrambling to gather enough support to begin debate on Trump’s sweeping tax and spending bill.

Social Security tax deduction

Only some Social Security beneficiaries will be able to deduct Social Security payments from their taxes, which was also a promise Trump made on the campaign trail. This deduction is also temporary. It would last from 2025 to 2029.

The bill includes a temporary $6,000 deduction for those over age 65 and eliminates Social Security tax liability for seniors with adjusted gross incomes of $75,000 or less or $150,000 if filing as a married couple.

The lowest-income seniors who already don’t pay taxes on Social Security, those who choose to claim their benefits before they reach age 65 and those above a defined income threshold could not claim the deduction.

This article originally appeared on USA TODAY: Medicaid, no tax on tips: When would the GOP bill take effect?

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