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House Bill
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Senate Bill
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Conference
(Final Bill)
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Individual Tax Rates
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Four brackets:
12 percent,
5 percent,
35 percent and
39.6 percent,
with clawback of income taxed at the 12 percent rate for taxpayers in the 39.6 percent bracket
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Seven brackets:
10 percent,
12 percent,
22.5 percent,
25 percent,
32.5 percent,
35 percent,
38.5 percent
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Seven brackets:
10 percent,
12 percent,
22 percent,
24 percent,
32 percent,
35 percent,
37 percent
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Capital Gains and Qualified Dividends Rates
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Zero percent if in 12 percent bracket;
15 percent if in 25 percent bracket;
20 percent if in 35 percent bracket
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Zero percent for taxpayers with income of $38,700 or less;
15 percent for taxpayers with income of $426,700 or less;
20 percent for taxpayers with income of more than $426,700
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Zero percent for taxpayers with income of $38,600 or less;
15 percent for taxpayers with income of $425,800 or less;
20 percent for taxpayers with income of more than $425,800
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Personal Exemption
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Repealed
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Suspended through 2025
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Suspended through 2025
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Standard Deduction
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$12,200 for single taxpayers, $18,300 for heads of household and $24,400 for married filing jointly
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$12,000 for single taxpayers, $18,000 for heads of household and $24,000 for married filing jointly
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$12,000 for single taxpayers, $18,000 for heads of household and $24,000 for married filing jointly
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Itemized Deductions
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Eliminates deduction for medical expenses, state and local income taxes, property tax of more than $10,000, mortgage interest expense on acquisition debt of more than $500,000, certain personal casualty losses, unreimbursed employee expenses and tax preparation fees;
Overall limitation on itemized deductions repealed
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Eliminates deduction for state and local taxes, property tax of more than $10,000, unreimbursed employee expenses and tax preparation fees;
Overall limitation on itemized deductions suspended until 2026
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Limits combined deduction for state and local taxes and property taxes to $10,000 from 2018 to 2025 and eliminates deduction for mortgage interest expense on acquisition debt of more than $750,000, unreimbursed employee expenses and tax preparation fees through 2025;
Overall limitation on itemized deductions suspended until 2026
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Alternative Minimum Tax (AMT)
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Repealed
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Retained with increased exemptions for individuals through 2025
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Retained with increased exemptions for individuals through 2025
Repealed for corporation
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Carried Interest
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Partnership interests received in exchange for services must be held for at least three years to be eligible for long-term capital gain tax rate
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Partnership interests received in exchange for services must be held for at least three years to be eligible for long-term capital gain tax rate
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Partnership interests received in exchange for services must be held for at least three years to be eligible for long-term capital gain tax rate
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Corporate Tax Rate
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20 percent starting in 2018
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20 percent starting in 2019
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21 percent starting in 2018
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Depreciation
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Immediate deduction of capital expenditures for property placed in service in the next five years up to $5 million per year with phaseout for income of more than $20 million
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Immediate deduction of capital expenditures for property placed in service in the next five years up to $1 million per year with phaseout for income of more than $2.5 million. Starting in 2024, the percentage of a property's cost that may be deducted immediately decreases 20 percent each year
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Immediate deduction of capital expenditures for property placed in service in the next five years up to $1 million per year with phaseout for income of more than $2.5 million. Starting in 2023, the percentage of a property's cost that may be deducted immediately decreases 20 percent each year
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Pass-Through Taxation
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Maximum tax rate of 25 percent on business income of S corporation shareholders, partners of partnerships and sole proprietorships if owners are passive investors and based on capital percentage;
Owners of businesses other than personal-service businesses can elect to apply a default capital percentage of 30 percent or establish the capital percentage based on facts and circumstances; owners of personal-service businesses must establish the capital percentage based on facts and circumstances
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S corporation shareholders, partners of partnerships and sole proprietorships can deduct 23 percent of business income, but deduction is limited to 50 percent of wages paid;
Owners of personal services businesses are ineligible unless income is less than $75,000
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S corporation shareholders, partners of partnerships and sole proprietorships can deduct 20 percent of business income, but deduction is limited to a percentage of wages paid for taxpayers with income exceeding 157,500 ($315,000 if married) that is phased in to 50 percent over the next $50,000 ($100,000 if married) of income;
For owners of personal services businesses, deduction is phased out over the next $50,000 ($100,000 if married) of income if income exceeds $157,500 ($315,000 if married)
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Interest Deduction
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Interest deduction limited to 30 percent of earnings before interest, tax, depreciation and amortization (EBITDA) for businesses with gross receipts of more than $25 million
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Interest deduction limited to 30 percent of earnings for businesses with gross receipts of more than $15 million
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Interest deduction limited to 30 percent of EBITDA for businesses with gross receipts of more than $25 million; depreciation, amortization and depletion are counted toward earnings beginning in 2022
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Net Operating Losses
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Eliminates net operating loss carrybacks; net operating loss carry forward deduction made indefinite but limited to 90 percent of the taxpayer's taxable income
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Eliminates net operating loss carrybacks; net operating loss carry forward deduction made indefinite but limited to 90 percent of the taxpayer's taxable income; starting in 2023, carry forward deduction is reduced to 80 percent of taxable income
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Eliminates net operating loss carrybacks; net operating loss carry forward deduction made indefinite but limited to 80 percent of the taxpayer's taxable income
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Section 199 Gross Production Activities
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Repealed
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Repealed
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Repealed
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Business Tax Credits
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R&D and low-income housing tax credits retained
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R&D and low-income housing tax credits retained
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R&D and low-income housing tax credits retained
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Taxation of International Income
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Territorial system
U.S. shareholders must include 50 percent of excess returns earned by controlled foreign corporations
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Territorial system
Minimum base erosion tax equal to 10 percent of the excess of modified taxable income over regular tax liability
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Territorial system
Minimum base erosion tax equal to 10 percent of the excess of modified taxable income over regular tax liability
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Earnings of Foreign Subsidiaries
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One-time deemed repatriation tax of 14 percent on income held as cash and 7 percent on non-cash holdings of foreign subsidiaries payable over eight years
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One-time deemed repatriation tax of 14.49 percent on income held as cash and 7.49 percent on non-cash holdings of foreign subsidiaries
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One-time deemed repatriation tax of 15.5 percent on income held as cash and 8 percent on non-cash holdings of foreign subsidiaries payable over eight years
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Dividends from Foreign Subsidiaries
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Excluded from income of U.S. corporations that own at least 10 percent of the foreign subsidiary
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Excluded from income of U.S. corporations that own at least 10 percent of the foreign subsidiary
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Excluded from income of U.S. corporations that own at least 10 percent of the foreign subsidiary
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Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income
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50 percent of foreign high-return amounts included currently in income of U.S. shareholders of a controlled foreign corporation
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Global intangible low-taxed income (GILTI) included currently in income of U.S. shareholders of a controlled foreign corporation. Domestic C corporations may deduct 50 percent of GILTI and 37.5 percent of foreign-derived intangible income (FDII) through 2025; deductions are reduced to 37.5 percent of GILTI and 21.875 percent of FDII after 2025
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GILTI included currently in income of U.S. shareholders of a controlled foreign corporation. Domestic C corporations may deduct 50 percent of GILTI and 37.5 percent of FDII through 2025; deductions are reduced to 37.5 percent of GILTI and 21.875 percent of FDII after 2025
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Subpart F Income
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Retained
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Retained
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Retained
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Gift Tax
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Retained; rate decreased to 35 percent beginning in 2024; exemption amount increased to $10 million
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Silent; exemption amount increased to $10 million
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Silent; exemption amount increased to $10 million
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GST
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Repealed beginning in 2024; exemption amount increased to $10 million
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Silent; exemption amount increased to $10 million
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Silent; exemption amount increased to $10 million
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Estate Tax
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Repealed beginning in 2024; exemption amount increased to $10 million
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Exemption amount increased to $10 million
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Exemption amount increased to $10 million
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Step-Up in Basis at Death
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Retained
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Silent
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Retained
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