The Tax Cuts and Jobs Act expires on December 31, 2025
Most of the individual income tax provisions in the Tax Cuts and Jobs Act (TCJA), passed in 2017, are set to end on December 31, 2025, unless Congress votes to extend them before that date. This means tax rates, standard deductions, child tax credits, and other individual provisions will revert to what they were before 2017 unless new legislation keeps them in place. The corporate tax rate, by contrast, was made permanent and will not change.
What happens on January 1, 2026, depends entirely on whether Congress acts. If no extension passes, tax brackets will shift, deductions will shrink, and credits will change. If Congress extends the provisions, they could remain in their current form, be modified, or expire on a new date. No automatic renewal occurs — a vote is required.
Key Takeaways
- Individual income tax provisions of the Tax Cuts and Jobs Act expire December 31, 2025, unless Congress extends them before that date.
- The corporate tax rate of 21 percent was made permanent and will not expire in 2025.
- If provisions expire, tax brackets widen, the standard deduction shrinks, and credits like the child tax credit decrease from their current amounts.
- Congress must pass new legislation to extend, modify, or replace the expiring provisions — nothing happens automatically.
- The outcome affects your 2026 tax return and beyond, so changes would appear when you file in 2027.
Which provisions expire and which stay permanent
The TCJA made some changes permanent and set others to expire. The corporate income tax rate was permanently lowered to 21 percent and will remain there. The individual income tax provisions — including tax rates, standard deductions, personal exemptions, child tax credits, and education credits — are scheduled to expire at the end of 2025.
Other provisions have different timelines. For example, the deduction for pass-through business income (Section 199A) also expires December 31, 2025. The estate tax exemption was increased under the TCJA but is scheduled to revert to a lower amount on January 1, 2026, unless Congress acts.
Some provisions already expired before 2025. For instance, certain business tax breaks and deductions phased out in earlier years. The key date for most people is December 31, 2025, because that is when changes to individual income taxes take effect.
What changes if Congress does not extend the provisions
If the individual income tax provisions expire without an extension, your tax situation will change starting with the 2026 tax year (the return you file in 2027). Tax brackets will widen, meaning more of your income falls into higher tax brackets. The standard deduction will decrease — for example, the 2025 standard deduction for a single filer is higher than it was in 2017, and it would drop back toward 2017 levels if provisions expire.
The child tax credit would decrease from its current $2,000 per child to $1,000 per child. The earned income tax credit and other credits would change as well. Personal exemptions, which were eliminated under the TCJA, would return, though this is offset by the lower standard deduction.
The exact dollar amounts depend on inflation adjustments that occur each year, so the 2026 brackets and deductions cannot be stated as fixed numbers today. What is certain is that for most households, the tax bill would increase if provisions expire without extension.
What Congress could do before December 31, 2025
Congress has several options. It could extend all the individual income tax provisions in their current form, keeping tax rates and deductions the same. It could extend them but modify them — for example, extending some provisions while allowing others to expire, or changing the rates or credit amounts. It could also let them expire as scheduled and pass new tax legislation that replaces them with different rules.
Congress could also extend the provisions beyond 2025 to a later date, such as 2027 or 2030. Any of these outcomes requires a vote and passage of legislation. The timing of that vote is uncertain — Congress could act months in advance or wait until late in 2025.
Historical precedent shows that Congress often extends tax provisions close to their expiration date rather than far in advance. This creates uncertainty for taxpayers and tax planners, because the rules for the coming year may not be finalized until late in the current year.
How the expiration affects your tax planning
If you are making financial decisions in 2024 or 2025 — such as whether to take a large deduction, when to recognize income, or how to structure a business — the uncertainty about 2026 tax rates matters. Some people may choose to accelerate income into 2025 if they expect higher rates in 2026. Others may defer deductions into 2026 if they expect lower rates.
However, these strategies depend on Congress's actions, which are not certain. A financial advisor or tax professional can help you think through the trade-offs, but no one can predict with certainty what Congress will do.
For most households, the practical impact is to wait and see what Congress decides. If you are self-employed, own a business, or have complex income sources, the expiration date may matter more to your planning.
The corporate tax rate and business provisions
The corporate income tax rate of 21 percent is permanent and will not change on December 31, 2025. This applies to C corporations — the standard corporate structure. The rate was lowered from 35 percent under the TCJA and will remain at 21 percent regardless of what happens to individual tax provisions.
Other business provisions have different expiration dates. The Section 199A deduction for pass-through business income (income from S corporations, partnerships, and sole proprietorships) expires December 31, 2025, the same date as individual provisions. If it expires, business owners who report income on their individual tax returns will lose this deduction unless Congress extends it.
What to watch for in 2025
As 2025 progresses, watch for announcements from Congress about tax legislation. Major tax changes are usually debated publicly for months before a vote. News coverage of tax bills, statements from congressional leaders, and reports from tax policy organizations will signal whether an extension is likely.
If you file taxes with a professional preparer, ask them in late 2025 what the current status is. If you file your own taxes, the IRS website and major tax software providers will publish updated information as the year ends and the 2026 tax year approaches.
The key point is that nothing changes automatically on January 1, 2026. Congress must act. Until it does, the scheduled expiration date of December 31, 2025, remains in effect.
Frequently Asked Questions
Will my taxes definitely go up in 2026?
Only if Congress does not extend the current provisions and does not replace them with similar ones. If Congress extends the Tax Cuts and Jobs Act provisions, your tax rates and deductions will stay the same. If Congress passes new tax legislation with different rules, the outcome depends on what that legislation says. No outcome is certain until Congress votes.
Does the expiration affect my 2024 or 2025 taxes?
No. The expiration date is December 31, 2025, so it affects your 2026 tax year — the return you file in 2027. Your 2024 and 2025 taxes are governed by the current rules and will not change based on the 2025 expiration.
What happens to the child tax credit after 2025?
If the Tax Cuts and Jobs Act provisions expire without extension, the child tax credit would decrease from $2,000 per child to $1,000 per child starting in 2026. If Congress extends the current provisions, the $2,000 credit continues. If Congress passes new legislation, the credit could be any amount that new law specifies.
Is the corporate tax rate going away?
No. The 21 percent corporate tax rate was made permanent under the Tax Cuts and Jobs Act and will not expire in 2025 or any other date. It will remain 21 percent unless Congress passes new legislation to change it.
When will Congress decide whether to extend these provisions?
Congress could vote at any time, but historically it often waits until late in the year when the expiration date is near. There is no set important date for Congress to announce its decision, so the timing is uncertain. Watch for news coverage and statements from congressional leaders as 2025 progresses.