The law makes President Donald Trump’s 2017 tax cuts permanent and introduces new tax breaks, while cutting spending on healthcare, food aid, and student loans|@WhiteHouse|X

President Donald Trump’s “One Big, Beautiful Act” is now law after he signed the nearly 900-page tax bill on Friday during the Fourth of July ceremony.

The law makes his 2017 tax cuts permanent and introduces new tax breaks, but cuts spending on healthcare, food aid, and student loans.

Here’s what it means for you:

Income tax rates stay the same
The law extends Trump-era income tax rates permanently, keeping lower brackets in place for individuals and families.

Bigger breaks for high-tax states
Individuals living in states where taxes are high will see state and local tax deductions rise to $40,000, up from $10,000, with a 1% annual increase through 2029. The cap will drop back to $10,000 in 2030.

Parents get expanded benefits
The child tax credit increases to $2,200 in 2026. “Trump Accounts” give $1,000 to children born between 2025 and 2028, with families allowed to contribute $5,000 annually.

Student loan programs shrink
Parent Plus and Grad Plus loans face new borrowing caps. Income-driven repayment plans end in 2026, replaced by two stricter options.

Seniors get temporary tax relief
For those above 65, the law introduces a new tax deduction for the 2025 through 2028 tax years. Senior citizens earning $75,000 or less—or $150,000 or less for married couples filing jointly—are allowed to deduct $6,000 from their taxable income.

EV and auto benefits change
Electric vehicle credits expire September 30.

For US-made cars, the law allows taxpayers to deduct up to $10,000 in auto loan interest from their taxable income.

Overtime and tipped workers benefit
Tipped workers can deduct up to $25,000 of tips from their taxable income. Overtime workers get a new deduction capped at $12,500 per individual, effective through 2028.

Medicaid rules get tougher
Starting in 2026, Medicaid will require able-bodied adults to work, study, or volunteer for 80 hours per month. Some states must charge co-pays and will get less federal funding.

SNAP recipients face new work rules
Able-bodied adults under 65 must work 80 hours a month to qualify for food aid. Some states must start co-funding SNAP by 2028.

Democrats slammed the bill for favoring the wealthy, while Trump claimed it would fuel explosive growth. The Congressional Budget Office warns it could add $3.4 trillion to the deficit by 2034.