HR 137 · 119th CongressIn Committee

TCJA Permanency Act

Latest updateJan 3, 2025

Referred to the House Committee on Ways and Means.

Taxation

Sponsor

Vern Buchanan

Introduced

January 3, 2025

Latest action

January 3, 2025

Legislative Progress

How far this bill has traveled through Congress

Introduced

Bill filed in chamber

Committee

Reviewed & reported

Passed Chamber

House or Senate vote

Passed Both

House & Senate agree

President

Sent to White House

Enacted

Signed into law

Introduced

Bill filed in chamber

Committee

Reviewed & reported

Passed Chamber

House or Senate vote

Passed Both

House & Senate agree

President

Sent to White House

Enacted

Signed into law

Latest Action

Referred to the House Committee on Ways and Means.

Plain-Language Summary

AI Generated

Under current law, the Tax Cuts and Jobs Act of 2017 temporarily reduced individual income tax rates, expanded the standard deduction, created a deduction for qualified business income from pass-through entities, increased the child tax credit, and raised the estate and gift tax exemption. These provisions were set to expire after December 31, 2025, reverting to higher tax rates and lower deductions that existed before 2017. Without action, millions of taxpayers would face higher tax bills and reduced tax benefits for families, small business owners, and investors starting in 2026.

The TCJA Permanency Act amends the Internal Revenue Code to make permanent the individual tax provisions that were scheduled to expire. The bill requires the Treasury Department to apply the 2017 tax rate brackets indefinitely across all filing statuses—married filing jointly, heads of household, single filers, and married filing separately—rather than allowing them to revert to pre-2017 levels. It also makes permanent the increased standard deduction amounts ($18,000 for married couples, $12,000 for single filers), the qualified business income deduction for pass-through entities, the enhanced child tax credit, and the higher estate and gift tax exemption. The bill removes sunset dates and expiration provisions that would otherwise trigger automatic tax increases.

The changes take effect for taxable years beginning after enactment, meaning the 2026 tax year and beyond. No new appropriations are required; the bill operates within existing Internal Revenue Code mechanisms. The permanence of lower rates and expanded deductions will reduce federal tax revenue compared to allowing the provisions to expire, affecting the federal budget baseline. Taxpayers filing returns in 2026 and later will see their tax liability calculated under the permanent rates and deductions established by this bill rather than the higher pre-2017 rates. Pass-through business owners will continue claiming the qualified business income deduction without interruption, and families will maintain the expanded child tax credit and standard deduction amounts indefinitely.

Key Provisions

1Establishes permanent individual income tax rates across all filing statuses at 2017 levels, preventing automatic increases scheduled for 2026 and later taxable years.
2Makes permanent the increased standard deduction amounts of $18,000 for married couples filing jointly and $12,000 for single filers, with annual inflation adjustments.
3Extends indefinitely the deduction for qualified business income earned by pass-through entities, eliminating the sunset provision that would have ended this benefit.
4Increases the estate and gift tax exemption to 2017 levels on a permanent basis, allowing larger transfers to heirs and charitable organizations without federal tax.
5Modifies capital gains tax brackets to align with the permanent ordinary income tax brackets and adjusts the alternative minimum tax exemption to permanent 2017 levels.

★ Why this matters

Tax rates and deductions that were temporary under the 2017 law would automatically increase and shrink in 2026, raising taxes on most households and reducing business deductions. Making these provisions permanent locks in current tax treatment indefinitely, eliminating the uncertainty created by scheduled expiration dates. Federal revenues will be lower than they would be under pre-2017 law, affecting the federal budget and deficit. Taxpayers, small business owners, and estates will have clarity about their long-term tax obligations without worrying about sudden changes.

● Who this affects

Small business owners and self-employed individuals using pass-through entities (sole proprietorships, partnerships, S-corporations) benefit most directly from permanent qualified business income deductions. Families with children gain from the permanent expanded child tax credit and higher standard deduction. Married couples and single filers across all income levels benefit from permanently lower tax rates. High-net-worth individuals and families with substantial estates benefit from the permanent increased estate and gift tax exemption. The Internal Revenue Service will administer the permanent provisions without managing expiration dates. Federal taxpayers overall will experience lower aggregate tax collections, affecting federal spending capacity.

Bill Text

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<DOC>

119th CONGRESS
  1st Session
                                H. R. 137

 To amend the Internal Revenue Code of 1986 to make permanent certain 
    provisions of the Tax Cuts and Jobs Act affecting individuals, 
        families, and small businesses, and for other purposes.

                    IN THE HOUSE OF REPRESENTATIVES

                            January 3, 2025

   Mr. Buchanan (for himself, Mr. Smith of Nebraska, Mr. LaHood, Mr. 
 Estes, Mrs. Miller of West Virginia, Mr. Kustoff, Ms. Tenney, Ms. Van 
  Duyne, Mr. Feenstra, Mr. Carey, Mr. Yakym, Mr. Moran, Mr. Miller of 
   Ohio, Mr. Rutherford, Mr. Crenshaw, Mr. Guest, Mr. Moolenaar, Mr. 
 Amodei of Nevada, Mr. Fulcher, Mr. Ellzey, Mr. Grothman, Mr. Meuser, 
Mr. Clyde, Mr. Rouzer, Mrs. Hinson, Mr. Rulli, Mr. Ezell, Mr. Bost, Mr. 
  Barr, Mr. Weber of Texas, and Mr. Carter of Georgia) introduced the 
 following bill; which was referred to the Committee on Ways and Means

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to make permanent certain 
    provisions of the Tax Cuts and Jobs Act affecting individuals, 
        families, and small businesses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``TCJA Permanency 
Act''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) References to the Tax Cuts and Jobs Act.--Title I of Public Law 
115-97 may be cited as the ``Tax Cuts and Jobs Act''.
    (d) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title, etc.
               TITLE I--INDIVIDUAL REFORM MADE PERMANENT

                        Subtitle A--Rate Reform

Sec. 101. Modification of rates.
   Subtitle B--Deduction for Qualified Business Income of Pass-Thru 
                                Entities

Sec. 111. Deduction for qualified business income.
Sec. 112. Limitation on losses for taxpayers other than corporations.
         Subtitle C--Tax Benefits for Families and Individuals

Sec. 121. Increase in standard deduction.
Sec. 122. Increase in and modification of child tax credit.
Sec. 123. Increased limitation for certain charitable contributions.
Sec. 124. Increased contributions to ABLE accounts.
Sec. 125. Rollovers to ABLE programs from 529 programs.
Sec. 126. Treatment of certain individuals performing services in the 
                            Sinai Peninsula of Egypt.
                         Subtitle D--Education

Sec. 131. Treatment of student loan discharges.
Sec. 132. 529 account funding for homeschool and additional elementary 
               …

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