What the TCJA changed for individual taxpayers
For tax years 2018 through 2025, the TCJA rewrote the individual income tax. It kept seven tax brackets but lowered most of the rates: 15%, 25%, 28%, 33% and 39.6% became 12%, 22%, 24%, 32% and 37%, while 10% and 35% stayed. The standard deduction rose from $12,700 to $24,000 for a married couple and from $6,350 to $12,000 for a single filer, and the personal exemption, $4,050 per person in 2017, dropped to zero.
With a bigger standard deduction and narrower itemized deductions, fewer households found it worthwhile to itemize. The other headline changes for individuals were these.
- A child tax credit of $2,000 per child instead of $1,000, up to $1,400 of it refundable, a new $500 credit for other dependents, and a phase-out starting at $200,000 of income, or $400,000 joint.
- A $10,000 cap on the deduction for state and local taxes, and a $750,000 limit, down from $1,000,000, on new mortgage debt whose interest is deductible.
- No miscellaneous itemized deductions subject to the 2% floor, and no overall phase-out of itemized deductions at high incomes.
- Larger alternative minimum tax exemptions that began to phase out only at $1 million of income on a joint return.
- An estate and gift tax exclusion built on a $10 million base, indexed for inflation, up from $5.49 million in 2017.
- A deduction of up to 20% of qualified business income for many owners of pass-through businesses.
The TCJA sunset: which rules were set to expire
The TCJA was enacted through budget reconciliation, and nearly every individual provision applied only to tax years beginning after December 31, 2017, and before January 1, 2026. That scheduled end became known as the TCJA sunset.
Other changes carried no end date. The flat 21% corporate rate was permanent from the start. So were indexing brackets with the chained consumer price index, limiting like-kind exchanges to real property, ending the option to undo Roth conversions, and the rule that alimony under divorce agreements signed after 2018 is neither deductible nor taxable.
Had the sunset arrived, 2026 would have brought back the 39.6% top rate, personal exemptions, the smaller pre-2018 standard deduction adjusted for inflation, a $1,000 child tax credit, uncapped SALT deductions and an estate exclusion built on $5 million.
Did the TCJA expire after 2025?
No. The One Big Beautiful Bill Act, signed July 4, 2025, removed the end dates from most individual provisions before they arrived and reshaped several of them. The personal exemption, for example, is now permanently zero rather than suspended, and the child tax credit amount now rises with inflation. Because brackets and the standard deduction are indexed every year, 2026 amounts run higher than the TCJA’s 2018 figures even where the rule itself did not change. For 2026, the TCJA’s individual rules fall into four groups.
- Made permanent: the seven rates from 10% to 37%, the zero personal exemption, the $500 credit for other dependents and the $750,000 mortgage debt limit.
- Made permanent and enlarged: a standard deduction of $16,100 single or $32,200 joint for 2026, a $2,200 child tax credit indexed for inflation, a $15 million estate exclusion and a business-income deduction with a new $400 minimum.
- Tightened: AMT exemptions phase out from $500,000, or $1 million joint, twice as fast; miscellaneous itemized deductions are repealed except educators’ classroom costs; and a new cap holds itemized deductions to about 35 cents per dollar in the 37% bracket.
- Still temporary: the SALT cap is $40,400 for 2026, reduced for incomes above $505,000, and returns to $10,000 in 2030.
TCJA rules that still shape retirement plans
Several TCJA changes matter most in retirement planning. The lower brackets, now permanent, set the price of moving pre-tax savings into a Roth account: in 2026 a married couple can have up to $100,800 of taxable income before leaving the 12% bracket, and $211,400 before leaving 22%. Because a conversion can no longer be undone, size it once, with the year’s other income in view.
With the bigger standard deduction, many retirees no longer itemize, so a gift by check often brings no tax benefit. From age 70½, a qualified charitable distribution from an IRA keeps the gift out of income instead, and bunching several years of gifts into one year can make itemizing worthwhile again. With a high estate exclusion, few estates owe federal estate tax, so the income tax heirs will owe on inherited pre-tax accounts usually matters more.
Common misunderstandings about the TCJA
Much of what was written about the TCJA between 2018 and mid-2025 assumed its individual cuts would end after 2025. Older articles, calculators and financial plans may still build in that reversion, which overstates future tax and makes moves timed to beat the sunset look more urgent than they are. A figure quoted for 2018 is rarely the 2026 figure, because most amounts are indexed for inflation and several changed again in 2025.
- Not everyone paid less. Households with dependents too old for the child credit, or with large state and local tax bills, could lose more than they gained.
- The corporate rate cut was never temporary; the 2025 end date applied to the individual provisions.
- Permanent means no scheduled end, not unchangeable. Congress can amend the law, and several newer deductions already end after 2028.
Illustrative numbers
A married couple with two children and $90,000 of wages: 2017 vs. 2018
2017 taxable income ($90,000 − $12,700 − 4 × $4,050)$61,100
2017 tax after a $2,000 child tax credit$6,232.50
2018 taxable income ($90,000 − $24,000)$66,000
2018 tax after a $4,000 child tax credit$3,539
Change in federal income tax−$2,693.50
The family had $4,900 more taxable income under the TCJA, yet its federal income tax fell by about $2,694 because the rates were lower and the child credit doubled. Both years assume the standard deduction. A household with older dependents or large state and local taxes could have come out behind.
At a glance
Key TCJA individual provisions: 2017 law, the TCJA years and 2026 law
| Provision | 2017 law | TCJA, 2018–2025 | 2026 law |
|---|---|---|---|
| Tax rates | 10%–39.6% | 10%–37% | 10%–37%, permanent |
| Standard deduction, joint | $12,700 | $24,000 in 2018, indexed | $32,200, permanent |
| Personal exemption | $4,050 each | $0 | $0, permanent |
| Child tax credit | $1,000 | $2,000 | $2,200, indexed |
| SALT deduction cap | None | $10,000 | $40,400; $10,000 from 2030 |
| Mortgage debt limit for interest | $1,000,000 | $750,000 | $750,000, permanent |
| Estate and gift exclusion | $5.49 million | $10 million base, indexed | $15 million |
| Qualified business income deduction | None | Up to 20% | Up to 20%, permanent |
Put it in your plan
TCJA in MoneyWhatIf
MoneyWhatIf’s tax model starts from 2026 federal schedules, deductions and filing statuses, so the seven post-TCJA brackets and the larger standard deduction are its baseline rather than a scenario. On the Taxes page, the federal bracket ladder starts with the standard deduction as its untaxed rung. Each year the model compares itemized deductions, after the SALT ceiling and its income-based reduction, with the standard deduction. Schedules are carried forward with plan inflation as an encoded rule snapshot, not a prediction of future law.
Common questions
TCJA FAQs
Did the TCJA get rid of the individual mandate?
It removed the penalty, not the mandate itself. The TCJA cut the shared responsibility payment for going without health coverage to $0 for months beginning after December 31, 2018. The requirement to have coverage is still in the tax code, but there is no federal penalty for skipping it, and this change never had an end date.
Did the TCJA change capital gains tax rates?
No. The 0%, 15% and 20% rates on long-term capital gains and qualified dividends stayed. What changed is where each rate starts: the TCJA gave them their own dollar thresholds, such as $77,200 of taxable income for the top of the 0% rate on a 2018 joint return, instead of tying them to the ordinary brackets. For 2026 the 0% rate applies up to $98,900 joint or $49,450 single. The 3.8% net investment income tax was left unchanged.
Why can’t I undo a Roth conversion anymore?
The TCJA repealed recharacterization of Roth conversions for tax years beginning after 2017. Before then, a conversion could be reversed after the fact, for example if the account fell in value. Now a conversion is final once made, so the full converted amount is taxable that year whatever markets do afterward, and it pays to check the year’s other income before converting.
Does the TCJA still affect 529 plans?
Yes. The TCJA first allowed 529 plan money to pay up to $10,000 a year of K–12 tuition. The 2025 law raised that to $20,000 per beneficiary starting in 2026 and widened qualifying K–12 costs to include items such as books, tutoring and test fees. The student-loan use added by the SECURE Act still applies.
Is the TCJA the same as the Trump tax cuts?
Largely, yes. “Trump tax cuts” is a common nickname for the TCJA, which President Trump signed on December 22, 2017. The label is also used for the 2025 law that extended most of the TCJA’s individual cuts and added new deductions, such as those for tips and overtime. When you see a figure quoted, check which law and which tax year it comes from.