The House Ways & Means and Energy & Commerce committees are holding hearings this afternoon on their respective portions of the "One Big Beautiful Bill," the budget reconciliation package to advance major portions of the Trump administration agenda. Both hearings begin at 2:00 p.m. ET on Tuesday, May 13, 2025.
The proposal includes significant Medicaid reforms that would reduce federal spending by roughly $715 billion over ten years. This is done by reducing the Federal matching funds ("FMAP"), implementing work requirements for "able-bodied" adults, adding more frequent eligibility checks, limiting the ability of states to use provider taxes to finance their portion of Medicaid expenses, and imposing cost sharing for Medicaid expansion enrollees who earn 100%-133% of the federal poverty level. However, it does not include per capita caps for states as many lawmakers have sought. Importantly, the package does not make cuts to Medicaid assisted living programs and Argentum will continue to advocate throughout this process against cuts that would harm access to care for seniors.
Major elements of the package include:
- Sec. 110102. No tax on overtime. This provision creates an above-the-line deduction for overtime premium pay during a given taxable year. Qualified overtime compensation means overtime compensation paid to an individual required under Section 7 of the Fair Labor Standards Act of 1938 that is in excess of the regular rate (as used in such section) at which such individual is employed. Additionally, taxpayers who are highly compensated employees or with earned income exceeding the dollar amount in effect under IRC section 414(q)(1)(B)(i) are ineligible to receive the deduction. A work-eligible Social Security number is required in order to claim the deduction. The deduction is allowed from tax years 2025 through 2028.
- Sec. 110101. No tax on tips. This provision creates an above-the-line deduction for qualified tips received by an individual in an occupation which traditionally and customarily receives tips during a given taxable year. In order to be considered a qualified tip, the tip amount must be paid voluntarily, is not subject to negotiation, and is determined by the payor. The deduction is allowed for both employees receiving a W-2 and independent contractors receiving a 1099-K, 1099-NEC, or reported by the taxpayer on Form 4317. Qualified tips must be received voluntarily by an individual in an occupation that traditionally and customarily receives tips on or before December 31, 2024, as provided by the Secretary of the Treasury. Furthermore, qualified tips do not include any amount received in the course of a specified service trade or business as defined in Internal Revenue Code (IRC) section 199A(d)(2)). Additionally, highly compensated employees or workers with earned income exceeding the dollar amount in effect under IRC section 414(q)(1)(B)(i) are ineligible to receive the deduction. A work-eligible Social Security number is required in order to claim the deduction. The deduction is allowed from tax years 2025 through 2028.
- Sec. 110103. Enhanced deduction for seniors. This provision provides a deduction for seniors (age 65 or older) of $4,000 per eligible filer with a modified adjusted gross income that does not exceed $75,000 for single filers ($150,000 for married filing jointly). The senior deduction is available to both itemizers and non-itemizers. The deduction is allowed for tax years 2025 through 2028. While this provision is not specific to long-term care, Argentum has advocated for a similar tax deduction for seniors through the Credit for Caring Act (H.R. 2036 and S. 925).
- Sec. 110111. Certain postsecondary credentialing expenses treated as qualified higher education expenses for purposes of 529 accounts. This provision allows tax-exempt distributions from 529 savings plans to be used for additional qualified higher education expenses, including “qualified postsecondary credentialing expenses” in connection with “recognized postsecondary credential programs” and “recognized postsecondary credentials”. Argentum has been working with the Tomorrow's Workforce Coalition to advance this concept through the Freedom to Invest in Tomorrow’s Workforce Act (H.R. 1151 & S. 756).
- Sec. 111001. Extension of special depreciation allowance for certain property. This provision permanently allows taxpayers to immediately expense 100 percent of the cost of qualified property acquired on or after January 20, 2025.
- Sec. 111003. Modified calculation of adjusted taxable income for purposes of business interest deduction. This provision permanently increases the cap on the deductibility of business interest expense for taxable years beginning after December 31, 2024. Specifically, it provides that “adjusted taxable income” is computed without taking into account deductions for depreciation, amortization, or depletion. As a result, “adjusted taxable income” corresponds with the financial accounting concept of earnings before interest, taxes, depreciation, and amortization (EBITDA). This provision also permanently modifies the definition of “motor vehicle” to include certain trailers and campers designed to be towed by or affixed to a motor vehicle. This change allows interest on floor plan financing for such trailers and campers to be deducted.
- Sec. 111103. Increased dollar limitations for expensing of certain depreciable business assets. This provision increases the maximum amount a taxpayer may expense under IRC section 179 to $2.5 million, reduced by the amount by which the cost of qualifying property exceeds $4 million. The $2.5 million and $4 million amounts are adjusted for inflation for taxable years beginning after 2025. The proposal applies to property placed in service in taxable years beginning after December 31, 2024.
- Sec. 111109. Modifications to low-income housing credit. This provision makes three changes to the LIHTC program. First, for calendar years 2026 through 2029, the “9% LIHTC” is restored to its 2021 level with a 12.5 percent allocation increase. Second, for the “4% LIHTC”, this provision lowers the bond-financing threshold to 25 percent for projects financed by bonds with an issue date before 2030. Last, this provision designates Indian and rural areas as “Difficult Development Areas” (DDAs).
- Sec. 112018. Limitation on individual deductions for certain State and local taxes, etc. This provision would increase the SALT cap to $30,000 permanently for taxable years beginning after December 31, 2025. This provision requires partnerships and S corporations to treat specified taxes as separately stated items; imposes an addition to tax in certain cases where a partnership makes a state or local tax payment, one or more partners receives a state or local tax benefit, and the allocation of the tax payment differs from the allocation of the tax benefit; prevents the capitalization of specified taxes; and grants the Secretary of the Treasury regulatory authority to prevent avoidance of the SALT cap.
Separately, Argentum is monitoring several provisions related to associations and non-profit entities, including Sec. 112025, which amends IRC sections 512 and 513 to increase the unrelated business taxable income of a tax-exempt organization by including the income from any sale or licensing by an organization of its name or logo.