OBBBA tax provisions stand firm as Democrats take Congress

Democratic control of both the House and Senate following the November 2026 elections places the One Big Beautiful Bill Act under legislative scrutiny. However, the tax code does not change automatically with the shift in power. President Trump retains veto authority over any bill that reverses major portions of the 2025 legislation. Overriding that veto requires a two-thirds vote in both chambers, a high bar for the new majority to clear.

The OBBBA, enacted in July 2025, locked in several key provisions. Individual income tax brackets remain at 10%, 12%, 22%, 24%, 32%, 35%, and 37% permanently. The standard deduction for 2026 is set at $32,200 for married couples filing jointly and $16,100 for single filers. These permanent changes provide stability for agricultural businesses, which often face volatile income from commodity prices and weather.

Not all benefits are permanent. Four specific deductions expire at the end of 2028: qualified tips, qualified overtime compensation, qualifying automobile loan interest, and an additional deduction for taxpayers aged 65 and older. Congress must act by 2029 to extend or modify these provisions. This makes the 2028 tax year the critical planning deadline for affected taxpayers.

For agricultural investment, 100% bonus depreciation is permanent under current law. It applies to qualifying property placed in service after January 19, 2025. A separate provision under I.R.C. §168(n) offers a special allowance for production property. Construction on such projects must begin before January 1, 2029, and the asset must be in service by January 1, 2031.

The qualified business income deduction under I.R.C. §199A is also permanent. It allows a deduction of up to 20% of qualified business income. A new minimum deduction of $400 applies to taxpayers with at least $1,000 of qualifying income from actively conducted businesses. This provision benefits pass-through entities common in agriculture, such as sole proprietorships and LLCs.

Estate and gift tax rules also changed permanently. The basic exclusion amount rises to $15 million per person in 2026, indexed for inflation. A married couple can shelter $30 million in assets. The Child Tax Credit increases to $2,200 per child in 2026 and $2,300 in 2027. New Trump Accounts will provide a one-time $1,000 federal contribution for children born between 2025 and 2028.