The key parts of the Voldemort Mega Bill that could impact you.

Do I agree with everything here? No! It is, however, a lot better than what the Dark Lord promised during his election. Ergo, more refined...less outrageous.

What Trump’s Megabill Means for You

How parents, retirees, tipped workers, Medicaid recipients and more will be affected

By Jasmine Li, WSJ

July 3, 2025 2:40 pm ET

WASHINGTON—The nearly 900-page Republican tax bill is headed into law after passing the House.

Broadly, the legislation makes President Trump’s 2017 tax cuts permanent, extending current income-tax rates. It also adds some new breaks while making cuts to federal healthcare coverage, food-aid and student loan programs. Here’s what it could mean for your finances.

If you live in a high-tax state

The bill would raise the maximum state-and-local-tax deduction to $40,000—up from $10,000 now—and increase it by 1% annually through 2029. The cap then reverts to $10,000 in 2030. But the maximum deduction would begin phasing down once income crosses $500,000. The income threshold would also increase 1% every year through 2029.

If you’re a parent

The legislation would raise the child tax credit to $2,200 from $2,000 starting in 2026, index it for inflation and extend it permanently. It also creates new “Trump Accounts” for children born between 2025 and 2028, with a one-time government contribution of $1,000 to invest on the child’s behalf. Families can contribute up to $5,000 a year, and the funds can be withdrawn in adulthood.

For parents of undergraduate students, the legislation would cap the Parent Plus student loan program. It would set new borrowing limits of $65,000 per student, and $20,000 a year per student. Parent Plus loans would no longer be eligible for income-driven repayment programs after July 1, 2026.

If you’re over 65

The bill doesn’t eliminate taxes on Social Security, but it adds a new tax deduction for seniors for the 2025 to 2028 tax years. People over 65 can deduct up to $6,000 from their taxable income if they make $75,000 or less, or $150,000 or less for married couples.

The maximum deduction starts shrinking when income crosses that threshold, and winds down completely once income crosses $175,000 per person or $250,000 per couple. Seniors would still get the existing additional senior standard-deduction tax break.

If you’re a student

The legislation would eliminate current income-contingent repayment plans for student loans paid out after July 1, 2026. It replaces them with two new options: a standard repayment plan, where borrowers pay a fixed amount every month over 10 to 25 years; or the Repayment Assistance Plan, which would tie payments to the borrower’s adjusted gross income with a payment term of 30 years.

The bill would eliminate the Grad Plus program that lets graduate students borrow as much as the cost of attendance, starting July 1, 2026. It adds new borrowing limits of $20,500 a year for graduate students and $50,000 a year for professional students—those in fields like medicine and law. There will also be aggregate loan limits of $100,000 for graduate students and $200,000 for professional students.

The bill also raises the endowment tax on private colleges, which could hit university budgets. Colleges with fewer than 3,000 students are exempt.

If you’re planning to buy a car

Under the new legislation, tax credits for buying an electric vehicle will expire Sept. 30. That includes a $7,500 incentive for buying a new EV, or $4,000 for a used one. The credit for buying and installing a home charging station would end June 30, 2026.

For the 2025 to 2028 tax years, the bill would enable taxpayers to deduct up to $10,000 in auto loan interest from their taxable income. This would only apply to U.S.-made cars. The maximum deduction phases down when income surpasses $100,000.

If you’re on Medicaid

Starting Dec. 31, 2026, the bill adds new work requirements and more frequent eligibility checks for Medicaid enrollees. Able-bodied adults would be required to work 80 hours a month, with some exceptions, including for caretakers of children under 14.

Starting Oct. 1, 2028, Medicaid expansion states would be required to charge enrollees up to $35 for some appointments if their income is between 100% and 138% of the federal poverty level. The legislation also limits a tax mechanism that states use to attract matching federal funds, which could impact hospital budgets, especially in rural areas.

If you receive SNAP benefits

The bill tightens eligibility requirements for Supplemental Nutrition Assistance Program recipients—the 80 hours a month work requirement would apply to able-bodied adults under 65, with the exception of people caring for children under 14. Under current law, the work requirements apply to adults under 55, with an exception for caregivers of children under 18. The bill would also require some states to chip in for SNAP payments starting in fiscal 2028, which could strain their budgets.

If you’re a tipped worker

For the 2025 to 2028 tax years, workers can deduct up to $25,000 of tips from their taxable income under the new plan. Note that this would only apply to federal income taxes, not state or payroll taxes.

The maximum deduction begins shrinking once income surpasses $150,000. Only certain professions would qualify for the tips deduction—the Treasury is required to publish the list within 90 days of enactment.

If you work overtime

The bill adds a “no tax on overtime” deduction capped at $12,500 for individuals or $25,000 for married couples. Individuals making $150,000 or less would qualify for the maximum deductions. This will be in effect for the 2025 to 2028 tax years, and only applies to federal income taxes, not state or payroll taxes.