OBBBA 2026 Tax Changes High Earners Need to Know

The One Big Beautiful Bill Act, signed in 2025, is the most consequential tax law for high earners since 2017. The OBBBA 2026 tax changes do more than tweak a few brackets. They make several expiring provisions permanent, raise the SALT cap for a defined window, and end a set of credits that many households counted on. If you earn $250,000 or more, the law reshapes decisions you make about your entity, your investments, and your estate. This guide walks through what actually changed, who it affects, and how to plan around it before year end.

What the new law changed, in one paragraph

Here is the short version. The 20% qualified business income deduction is now permanent. So is 100% bonus depreciation. The federal estate and gift exemption jumps to $15 million per person and stays there. The individual SALT deduction cap rises from $10,000 to $40,000 through 2029, though it phases back down for the highest earners. A group of clean energy credits ended, and a handful of new provisions arrived, including a redesigned Opportunity Zone program and new savings accounts for children. Each of these deserves its own look, because the details decide whether a provision helps you or passes you by.

The provisions the OBBBA 2026 tax changes made permanent

The most important theme of the law is permanence. Several of the strategies high earners relied on were scheduled to expire at the end of 2025. Instead of another temporary extension, Congress locked them into the code. That certainty changes how you plan, because you no longer have to time decisions around a sunset date.

The 20% QBI deduction is now permanent

The qualified business income deduction under Section 199A lets many owners of pass-through businesses deduct up to 20% of their qualified income. It was set to disappear after 2025. The new law makes it permanent, which removes a cloud that hung over every S-Corporation and partnership plan. For a business owner with $400,000 of qualified income, a full deduction can shelter a substantial share of profit from tax, subject to the income thresholds and the wage and property limits that still apply. If you want the mechanics, our breakdown of the QBI deduction under Section 199A explains who qualifies and how the phase-outs work.

100% bonus depreciation returns for good

Bonus depreciation had been phasing down and was headed toward zero. The OBBBA restores 100% bonus depreciation and makes it permanent for qualifying property acquired and placed in service after January 19, 2025. In plain terms, a business can once again deduct the full cost of many equipment and short-life asset purchases in the year they are placed in service, rather than spreading the deduction over many years. For real estate investors, this pairs directly with a cost segregation study, which reclassifies parts of a building into shorter recovery periods so more of the purchase can be written off immediately.

A permanent $15 million estate and gift exemption

For high-net-worth families, this may be the headline. The federal estate and gift tax exemption rises to $15 million per individual, or $30 million for a married couple, effective January 1, 2026, and it is indexed for inflation. Unlike the 2017 law, this exemption has no scheduled sunset, so families no longer face a looming cliff that would have cut the exemption roughly in half. That said, permanent in tax law means until Congress changes it, so estate plans should still be reviewed rather than set and forgotten.

How the OBBBA 2026 tax changes reshaped the SALT cap

The state and local tax deduction was capped at $10,000 in 2017, a change that stung earners in high-tax states. The new law raises that cap to $40,000 starting in 2025, with small scheduled increases through 2029, before it reverts to $10,000 in 2030. The catch matters for this audience: the higher cap phases back down for taxpayers with income above roughly $500,000, moving toward the old floor as income climbs.

The practical result is mixed. A household earning $300,000 in a high-tax state gains real deduction room. A household earning well over $500,000 sees much of that benefit phased away. This is exactly why the pass-through entity tax workaround remains valuable for business owners, since it moves state tax to the entity level where the individual cap does not reach. The law left that workaround intact, even though earlier drafts floated limiting it.

The OBBBA at a glance

The table below summarizes the provisions most likely to affect a high earner. Treat it as a map, not personalized advice, and confirm the current figures before you plan around them.

What the law ended: the clean energy credits

Not every change is a benefit. The OBBBA terminated a set of clean energy tax credits that had been available in prior years, including the residential clean energy credit for solar and similar improvements, the credit for new and used electric vehicles, and the energy efficient commercial buildings deduction. If your plan for 2026 assumed one of these credits, that assumption no longer holds. Anyone who was weighing a solar installation or an electric vehicle partly for the tax benefit should recheck the current rules, because the federal incentive that once supported the decision has generally been removed.

What the law added for high earners

Alongside the provisions it preserved, the law created several new ones. A few are worth putting on your planning radar for 2026 and 2027.

• A redesigned Opportunity Zone program. The Opportunity Zone incentive becomes permanent starting in 2027, with a rolling five-year deferral clock and a new rural track that offers a larger basis step-up. Our guide to Opportunity Zones 2.0 covers the timing and who it fits.
• New savings accounts for children. The law introduced tax-advantaged accounts for minors, sometimes called Trump Accounts, designed to build long-term savings with certain federal contributions for eligible newborns. The rules are still settling, so watch for guidance before funding one.
• Restored R&D expensing. Businesses can again immediately deduct domestic research and development costs, rather than spreading them over five years, which helps companies that invest heavily in product development.
• New charitable rules. The law added an above-the-line charitable deduction for people who do not itemize, while introducing a floor on itemized charitable deductions and a cap on the value of itemized deductions for the top bracket. The net effect depends on how and how much you give.

A worked example: one owner, two plans

Numbers make the shift concrete. Consider an S-Corporation owner in a high-tax state with $600,000 of qualified business income who also buys $150,000 of equipment during the year. The figures below are illustrative and simplified to show the mechanics, not a promise of any specific result. Your outcome would depend on your state, your entity, and many other factors.

Under the old trajectory, the QBI deduction was set to expire, bonus depreciation was phasing toward 40%, and the SALT deduction was capped at $10,000. Under the new law, the same owner keeps a permanent 20% QBI deduction, writes off the full $150,000 of equipment in year one through 100% bonus depreciation, and, by using the pass-through entity tax election, moves state income tax off the capped individual return. No single change transforms the bill on its own. Stacked together, they may reduce taxable income by a meaningful amount in the same year. This is why the law rewards a coordinated plan rather than a single reaction at filing time.

Planning moves to consider for the rest of 2026

Law changes are only useful if you act on them while the year is open. A short review now generally beats a scramble in April. The steps below are a starting framework, not a prescription.

1. Revisit your entity. With the QBI deduction permanent, the case for an S-Corporation or a well-structured pass-through is clearer for many owners. Confirm your salary and structure still fit.
2. Time large purchases. If 100% bonus depreciation helps you, the year an asset is placed in service matters, so coordinate equipment and property purchases with your income.
3. Reassess your estate plan. A $15 million permanent exemption changes gifting math for high-net-worth families, and existing trusts drafted around a lower or sunsetting number may need a second look.
4. Model the SALT change. If your income sits near or above $500,000, run the phase-down and compare it against a pass-through entity tax election.
5. Drop dead assumptions. Remove any expired clean energy credit from your 2026 projections so you are not planning around a benefit that no longer exists.

Who should act now, and who can wait

Business owners with pass-through income have the most to gain, because the permanent QBI deduction and restored bonus depreciation both land in their lap. Real estate investors benefit from the depreciation changes and should watch the 2027 Opportunity Zone launch. High-net-worth families should treat the estate exemption as a reason to review their plan this year, since large gifts take time to structure. High-income W-2 employees have fewer levers here, though the SALT and charitable changes still touch their returns. In every case, whether a provision applies to you depends on your income, your entity, and your state, so a general summary like this one is a prompt to look closer, not a conclusion.

The bottom line on the new law

The OBBBA 2026 tax changes trade the uncertainty of expiring provisions for a more permanent framework, while raising some limits, tightening others, and ending a set of credits. For high earners, the practical message is simple. The rules that shape your tax bill just moved, and the households that adjust their plans this year will capture more of the benefit than those who wait until filing season. Review your entity, your major purchases, and your estate plan against the new law, and treat any figure here as general education rather than personalized advice.

If you want a structured starting point, download our free guide to the top five tax strategies for high-income earners, then go deeper with the ETS Playbook of 100+ tax strategies to see how these provisions fit into a full plan.

Frequently asked questions

Is the higher SALT cap permanent?

No. The $40,000 cap applies through 2029 with small annual increases, then reverts to $10,000 in 2030. It also phases back down for taxpayers with income above roughly $500,000, so many high earners see a reduced benefit. Because the numbers are indexed and detailed, confirm the current figures with a licensed tax professional.

Do the clean energy credits still exist for 2026?

Generally no. The law terminated the major residential clean energy, electric vehicle, and commercial efficiency credits, so a purchase you planned partly for the federal tax benefit should be re-evaluated under the current rules before you commit.

Does the permanent estate exemption mean I can ignore estate planning?

Not at all. A $15 million exemption is generous, but permanent in tax law means until Congress changes it, and state estate taxes and non-tax goals still apply. Large gifts and trusts take time to structure, so a review with a qualified advisor is worthwhile.

For primary sources, review the IRS overview of federal estate tax and its qualified business income deduction FAQs before you act on any provision described here.

The strategies described here are general educational information about the U.S. tax code. Individual results vary based on income, entity structure, state law, and other factors, and the provisions of the One Big Beautiful Bill Act are subject to future guidance and legislative change. This is not personalized tax, legal, or financial advice. Consult a licensed tax professional before implementing any strategy.