Former President Donald J. Trump won the 47th presidential election and his second term in the Oval Office on November 5, 2024. A change in administration almost always brings with it changes in policies. Below is a summary of some of the tax policy changes one might expect to see from the incoming Trump administration. 

The Tax Cuts and Jobs Act 

Passed in December 2017, the Tax Cuts and Jobs Act (TCJA) significantly modified taxation for both individuals and corporations, and a December 31, 2025, expiration date is fast approaching for many TCJA provisions. However, the Trump administration is likely to extend, if not make permanent, several provisions. 

Corporate Taxes 

Under the Trump administration, companies may see a decrease in the corporate tax rate from 21% to 20%. Companies that make their products in the United States may see a further decrease in corporate tax rates of 15%. 

Individual Income Taxes 

Set to expire at the end of December 2025 are TCJA provisions that reduced individual income tax rates. During his campaign, President Trump discussed making these provisions permanent. Additionally, President Trump proposed exemptions from individual income tax for social security benefits, tips, and overtime pay. 

Another proposal by President Trump would allow individuals to claim a deduction for vehicle loan interest so long as the vehicle was built in the United States. Also, regarding vehicles, the Trump Administration may repeal tax incentives for electric vehicles. 

Child Tax Credit 

Vice President JD Vance discussed increasing the child tax credit from $2,000 to $5,000 with no disqualifying income limitation. Another possibility is that the Trump administration extends the TCJA’s child tax credit provision, and the child tax credit would remain at $2,000. 

Tariffs 

During his campaign, President Trump proposed imposing a universal tariff of 10 to 20% on all imports, as well as a 60% tariff on imports from China. President Trump also discussed his Tariff plan—an “all tariff policy” in which tariffs would replace and eliminate federal individual income tax. 

State and Local Taxes 

The TCJA included a provision that capped state and local tax deductions at $10,000. In a reversal of his own policies, President Trump is in support of expanding federal deductions for state and local taxes paid. Under the new Trump administration, one might see this cap increase or be discontinued altogether.