President Trump’s “Big Beautiful Bill” reshapes more than just tax brackets. Several tax credits, some widely used, others industry-specific, are changing in ways that could either boost your refund or shrink your benefits.
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Here’s a breakdown of which credits could grow, which ones might phase out and what to watch for in tax year 2025.
Several tax credits are getting a boost under the bill, especially those aimed at working families, low-income earners and domestic industries. Here are the ones most likely to increase.
The Big Beautiful Bill expands credits for domestic production, particularly those in semiconductor manufacturing and advanced industries. According to CNBC, tax credits for semiconductor firms would increase from 25% to 35% — more than the 30% increase in the bill’s draft.
“Companies in these fields should review capital plans and evaluate where existing or upcoming projects align with new eligibility,” Laurence Sotsky, CEO of Incentify, wrote in an email. “The potential savings could directly affect ROI on high-impact investments.”
The bill expanded the FICA tips credit to include the beauty industry, which is now effective for tax years beginning after Dec. 31, 2024, PwC reported.
“Previously available only to food and beverage businesses, this credit now allows beauty salons, spas and personal care service employers to claim a dollar-for-dollar refund on the 7.65% FICA taxes they pay on employee tips, effective beginning January 1, 2025,” Sotsky explained.
The higher-value Child Tax Credit (CTC), which was due to expire at the end of 2025, was permanently enhanced in the bill, according to H&R Block.
“The nonrefundable Child Tax Credit increased from $2,000 to $2,200 starting this year and will be indexed for inflation going forward,” wrote Dina Leader Powers, CPA, CFP, wealth manager at Fairway Wealth Management in Independence, Ohio, in an email.
The higher phase-out thresholds — $200,000 or $400,000 for joint filers — are now permanent and apply to both the Child Tax Credit and the $500 credit for other dependents, she added.
Starting in 2025, the maximum child and dependent care credit rate increases to 50%, reduced by 1 percentage point for every $2,000 of income over $15,000, but not below 35%, Leader Powers explained.