2026 tax year · reference
OBBBA: what changed for 2026
The One Big Beautiful Bill Act rewrote a stack of expiring tax rules. Here's what it changed, who it helps or hurts, and the figure that matters, each read from the verified 2026 dataset.
The One Big Beautiful Bill Act (OBBBA) made several temporary tax breaks permanent, restored a few that had lapsed, and let one big benefit expire. If you're self-employed, sell online, hold startup equity, or buy your health insurance on the marketplace, at least one of these changes touches your 2026 return. Every figure below comes straight from the same dataset the calculators use.
QBI deduction (Section 199A) made permanent Positive
20.0% deduction, permanent
The 20% pass-through deduction was set to expire after 2025. OBBBA made it permanent. Sole proprietors, partnerships and S-corps keep deducting up to 20.0% of qualified business income. Specified service businesses still phase out above $201,750 single and $403,500 married filing jointly.
100% bonus depreciation made permanent Positive
100.0% first-year write-off
Bonus depreciation had been phasing out (40% in 2025, headed to zero). OBBBA restored 100.0% bonus depreciation permanently for qualified property placed in service after January 19, 2025. So equipment, computers and heavy vehicles can be written off in full in year one. Some states (California among them) do not conform, so the deduction is added back for state tax.
1099-K reporting threshold restored Mixed
$20,000 and 200 transactions
The $600 threshold from the American Rescue Plan is gone; OBBBA restored the $20,000-and-200-transactions threshold. Most casual sellers will not get a 1099-K. But all income is still taxable whether or not a form is issued. The threshold only decides whether the platform must report it.
SALT cap raised to $40,400 Neutral
$40,400 (was $10,000)
For 2026 the state-and-local-tax deduction cap rises from $10,000 to $40,400. It phases out above about $505,000 of income and reverts to $10,000 in 2030. High-tax-state itemizers deduct far more state income and property tax; Schedule C business deductions were never subject to the SALT cap.
QSBS exclusion cap raised Positive
$10,000,000 → $15,000,000
OBBBA raised the Section 1202 QSBS exclusion cap from $10,000,000 to $15,000,000 for stock acquired after July 4, 2025, and added a tiered holding period. Qualified small-business stock held long enough can exclude up to $15,000,000 of gain from federal tax entirely.
ACA subsidy enhancements ended Negative
Hard 400% FPL cliff returned
The enhanced premium tax credits that removed the subsidy cliff expired December 31, 2025. For 2026 the pre-2021 rules are back: 100% to 400% of FPL (MAGI-based). Cross 400% of the federal poverty level by a dollar and the entire subsidy disappears. So a late-year side-hustle payment can be very expensive.
R&D expensing restored Positive
Immediate expensing, domestic
TCJA had forced businesses to amortize research costs over five years from 2022. OBBBA restored immediate expensing for domestic R&D, software development and product work can be fully deducted in the year incurred. Foreign R&D must still be amortized over fifteen years.
Also extended
The Work Opportunity Tax Credit, for hiring veterans, SNAP recipients and the long-term unemployed, was extended through 2026. Check current IRS guidance for the per-employee credit amounts, which vary by target group.
Related tools
- 1099 & self-employment tax where QBI and the 1099-K land
- QSBS calculator the raised exclusion
- ACA subsidy calculator the returned cliff
A plain-language summary of the 2026 provisions, with figures from the verified dataset. Effective dates and phase-outs have nuances a summary can't fully capture, confirm against IRS guidance for your situation. Not tax advice.