Income Insights: One Big Beautiful Bill Impact for Businesses
Learn how the One Big Beautiful Bill Act introduced significant tax changes affecting business investment, research and development (R&D) expensing, bonus depreciation, pass-through deductions, qualified small business stock, and energy tax credits.
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Key takeaways
- The One Big Beautiful Bill Act, signed into law on July 4, 2025, introduced a range of permanent and temporary tax changes aimed at stimulating business investment, simplifying compliance, and revising energy-related incentives.
- Permanent R&D expensing was returned. Businesses can again fully expense domestic R&D costs, with additional retroactive relief available for certain smaller businesses.
- 100% bonus depreciation was restored. Qualified equipment, machinery, and other eligible property acquired after January 19, 2025, may qualify for full bonus depreciation.
- Pass-through business owners gained certainty. The Section 199A 20% pass-through deduction was made permanent, with expanded income limitations and a new minimum deduction for certain taxpayers.
- Energy tax incentives are being restructured. Several Inflation Reduction Act–related credits were modified or repealed, while new requirements and restrictions may affect future clean energy projects.
Common questions about the OBBB tax impacts on businesses
- What is the One Big Beautiful Bill Act?
The One Big Beautiful Bill Act, signed into law on July 4, 2025, introduced a range of permanent and temporary tax provisions designed to encourage business investment, revise certain deductions, and modify energy-related tax incentives.
- How does the legislation affect business investment?
The law restored full domestic R&D expensing, providing 100% bonus depreciation for qualifying property, and allowed temporary expensing of certain production-related property, potentially supporting capital investment decisions.
- How were qualified small business stock rules updated?
The bill created tiered gain exclusions based on holding periods and increased key eligibility thresholds, including the maximum excludable gain amount and the gross-asset limit for issuing corporations.
- What are the key energy tax credit changes?
The legislation modified or repealed several existing energy incentives, accelerated eligibility deadlines for some credits, extended others through 2029, and introduced new foreign entity of concern restrictions for certain projects.
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Allspring Global Investments does not provide accounting, legal, or tax advice or investment recommendations. Any tax or legal information on this page is merely a summary of our understanding and interpretations of some of the current income tax regulations and is not exhaustive. Investors should consult their tax advisor or legal counsel for advice and information concerning their particular situation.
This material is provided for informational purposes only and is intended for retail distribution in the United States.
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