The “Big, Beautiful Bill” introduces several tax changes for the construction industry. Key provisions include:
- 100% Bonus Depreciation: This is now permanent, allowing full expensing of eligible equipment and property starting retroactively from January 19, 2025.
- Increased Section 179 Expensing: The deduction limit has been raised to $2.5 million, with a phase-out for purchases over $4 million.
- Immediate Expensing for U.S. Production Property: Nonresidential manufacturing property built between January 20, 2025, and the end of 2028 can qualify for full depreciation.
- R&D Expense Deduction Restoration: Domestic research expenses can be fully deducted in the year they are incurred.
- Permanent QBI Deduction: The 20% pass-through business deduction is now indefinite.
- More Interest Deductions: The interest expense limit now uses EBITDA, which is beneficial for capital-heavy companies.
- Temporary Higher SALT Cap: The SALT deduction increases to $40,000 (indexed) through 2029.
- Accelerated Cutoff for Green Energy Credits: Energy-efficient building deductions and home credits now expire after mid-2026.
- Expanded Revenue Deferral: Larger residential projects with more than four units can now defer income recognition until completion.
- Temporary Overtime Deduction: From 2025 to 2028, workers can deduct up to $12,500 ($25,000 for joint filers) for qualifying overtime pay.
Most of these benefits are “front-loaded” through 2028, businesses and individuals should consult with a tax professional to understand how these changes affect them.