Here Are Some Key Provisions in Senate’s Version of the Big Beautiful Bill

Trump’s One Big Beautiful Bill undergoes some changes.

Chairman Sen. Mike Crapo (R-Idaho) (L) and Treasury Secretary Scott Bessent (R) arrives for a Senate Finance Committee hearing on Capitol Hill in Washington on June 12, 2025. Senate Finance Committee met with Bessent to discuss the U.S. President Donald Trump's fiscal year 2026 budget request for the Department of the Treasury. Andrew Harnik/Getty Images

The Senate Finance Committee has released its version of the One Big Beautiful Bill, presenting changes different from those in the House legislation.

Republican lawmakers in both chambers will need to act swiftly, if they are to send the sweeping tax-cut and spending bill to President Donald Trump’s desk before July 4.

While both versions are broadly similar—they make the tax rates and income brackets of the 2017 Tax Cuts and Jobs Act permanent, for example—the Senate alternative made several changes.

Here are the differences between the House and Senate versions:

Pass the SALT

The State and Local Tax (SALT) Deduction, a federal tax break permitting deductions from state and local tax payments, has been a source of contention among lawmakers.

The House bill would raise the maximum deduction for SALT payments from $10,000 to $40,000 per household. The tax break would also be phased out for incomes over $500,000.

In the Senate version, the original $10,000 SALT cap would remain in place.

Child Tax Credit

Lawmakers in the lower chamber increased the popular Child Tax Credit to $2,500 through 2028, after which it will revert to $2,000.

Senators permanently raised it to $2,200 and indexed the tax credit to inflation.

Under current law, the Child Tax Credit is set at $2,000 per child and is scheduled to decrease to $1,000 next year.

Standard Deduction for Seniors

The expanded standard deduction for seniors is a notable component of the One Big Beautiful Bill. While both chambers include a bonus deduction for Americans 65 and older, the amount differs in size.

The House offers a deduction of up to $4,000 for individuals aged 65 and older. The Senate boosts the deduction to $6,000 and phases it out for high-income seniors.

Both versions would see the bonus deduction end after 2028.

No Tax on Tips

The One Big Beautiful Bill followed through on the president’s campaign promise to eliminate taxes on tips and overtime pay. The legislation provides a deduction for tipped income, which expires in 2028.

The House does not insert a cap, while the Senate version limits the deduction to $25,000.

Green Energy

Both chambers have added language to address green energy tax credits and other incentives introduced by President Joe Biden and the Inflation Reduction Act.

The main difference, however, is the timing.

A waiter carries food at The Farmhouse restaurant in Newport Beach, Calif., on Sept. 9, 2020. John Fredricks/The Epoch Times

While the House bill would abolish many clean tax credits for solar and wind projects within 60 days of the legislation’s passage, the Senate would allow a gradual phaseout through 2027. In some instances, the tax credits for geothermal, hydro, and nuclear initiatives would remain intact until 2036.

Business Taxes

The One Big Beautiful Bill contains a plethora of business-friendly tax breaks, although the Senate ups the ante.

In the House, businesses would be granted 100 percent expensing for research and development costs through 2029. The Senate would make that permanent.

Bonus depreciation is a significant tax incentive that allows companies to deduct all or part of the cost of equipment and property in the year it is put into service. Current law states that the deduction rate is 40 percent in 2025, 20 percent in 2026, and zero in the subsequent years.

Under the House version, the bonus depreciation for businesses is 100 percent through 2029 and is then phased out. The Senate bill makes the 100 percent deduction permanent.

Business interest expenses, meanwhile, are expanded to include depreciation and amortization through 2029 in the House version. The Senate legislative text makes that permanent.

Proponents argue that these tax breaks are crucial for businesses investing in the United States.

“Congress must follow the Senate text and make full expensing permanent to give businesses the certainty they need to invest in America over the long-term. This improvement over the House proposal will bolster the pro-growth elements of this tax bill,” the National Taxpayers Union said in a report.

Critics say that it complicates growth prospects and the tax code.

“By introducing narrowly targeted new provisions and sunsetting the most pro-growth provisions, like bonus depreciation and research and development expensing, it leaves economic growth on the table and complicates the structure of the tax code,” economists at the Tax Foundation said in an analysis.

Section 899 Tax

Lawmakers introduced Section 899, a retaliatory tax aimed at foreign investors from countries that impose discriminatory taxes on U.S. companies. The measure introduces a surtax of up to 20 percent on U.S.-sourced income, overrides existing tax treaties, and exempts U.S. Treasury securities.

The House text would go into effect in 2028, while the Senate version would begin in 2027.

Medicaid in Focus

Senate Republicans implemented measures targeting states’ efforts to bolster Medicaid funding to providers.

Both versions would cap provider taxes—state-imposed levies on health care providers to fund a portion of Medicaid spending—at 3.5 percent by 2031, down from the current rate of 6 percent. It would also begin in 2027.

The change would only apply to states that expanded Medicaid under the Affordable Care Act. These states would be restricted from introducing new taxes.

The Senate bill differs from the House version in that it aims to close loopholes and prevent states from creating workarounds to circumvent the law.

Debt Ceiling

House Republicans voted to raise the debt ceiling by $4 trillion, while the Senate version would increase the limit by $5 trillion.

In May, appearing before a House appropriations subcommittee, Treasury Secretary Scott Bessent warned that the United States was “on the warning track,” as the government would soon run out of cash to pay its bills.

“Just as an outfielder running for a fly ball, we are on the warning track,” Bessent said. “And when you’re on the warning track, it means the wall’s not far away.”

The Congressional Budget Office, a nonpartisan budget watchdog, estimated earlier in June that the so-called X-date—the estimated day when the U.S. government can no longer meet its obligations—ranges between mid-August and the end of September. That forecast was revised from the earlier projection of August 1.

The debt ceiling currently stands at slightly above $36 trillion.