Here’s what HIVE AI had to say about “How do the One Big Beautiful Bill Act (OBBBA) provisions affect QBI, SALT, estate, and charitable deductions?”:

OBBB changes to QBI, SALT, estate, and charitable deductions

Qualified Business Income (QBI) – section 199A

What stays the same

• The basic QBI framework remains: up to a 20% deduction of qualified business income, plus 20% of qualified REIT dividends and PTP income, subject to wage/property and income-based limitations and the overall 20% of taxable income cap. 1

What OBBB changed

• Increased phase-in ranges for the wage/UBIA limitations and SSTB phase-out:
  • Threshold “phase-in amounts” increased from $50,000/$100,000 to $75,000/$150,000 (single/joint). This widens the band before the full limitations apply. 2
• New minimum deduction for active QBI:
  • If you have at least $1,000 of “active” QBI (material participation), your QBI deduction is at least $400, even after applying other 199A limits. 2
• Inflation indexing:
  • The $400 minimum and the $1,000 active-income floor are indexed for inflation for tax years beginning after 2026. 2

Practical notes

• The expanded phase-in range can preserve more of the deduction for upper‑middle‑income filers before wage/UBIA or SSTB limits fully bite.
• The “active QBI” $400 minimum is modest but ensures a floor benefit when limits or low taxable income would otherwise reduce the deduction to zero. 2

State and Local Tax (SALT) deduction

Higher cap with an income test (temporary)

• Cap increased from $10,000 to $40,000 for 2025–2029.
• An income limit begins at $500,000 and phases the enhanced cap back down to $10,000 by $600,000 of income; both the cap and income thresholds increase 1% annually through 2029.
• Reverts to a permanent $10,000 cap starting in 2030. 3

Itemized deduction benefit cap for top bracket

• New rule limits the tax value of itemized deductions to 35 cents on the dollar for taxpayers in the top bracket; this effectively reduces the marginal benefit of SALT (and other itemized deductions) at the highest incomes. 3

Practical notes

• The temporary $40,000 cap mostly benefits higher‑SALT filers below the income phase‑out band.
• High‑income filers may see limited benefit from SALT (and other itemized deductions) due to the 35‑cent value cap. 3

Federal estate and gift tax

Permanent higher exemption

• The scheduled 2026 “sunset” is canceled; instead the basic exclusion amount is increased to $15,000,000 per decedent and made permanent, indexed annually.
• Applies to decedents dying and gifts made after December 31, 2025. 4

Practical notes

• Fewer estates will be taxable; lifetime gift and estate planning can assume a permanently higher, inflation‑indexed exclusion. 4

Charitable contribution deductions

New floors before individuals and C‑corps can deduct

• Individuals: a new 0.5% “floor” of contribution base applies; only the portion of charitable gifts above 0.5% of contribution base is deductible. Carryovers coordinate so amounts disallowed solely by the floor can be carried forward under specific rules. Effective for tax years beginning after 12/31/2025. 5
• Corporations: a new 1% floor applies similarly, with specific FIFO and carryforward coordination rules. Effective for tax years beginning after 12/31/2025. 6

Cash gifts to public charities coordination

• OBBB revises the coordination of the 60% of contribution base limit for cash gifts with other percentage limits to reflect the new structure and floors. 5

Special adjustment

• Native Alaskan subsistence whaling expense cap increased from $10,000 to $50,000 for years beginning after 12/31/2025. 7

Itemized deduction value cap and other itemized rules

• For those in the top bracket, the new 35‑cent benefit cap reduces the marginal tax value of charitable deductions. TCJA’s tighter mortgage interest rules and suspension of many miscellaneous itemized deductions are made permanent. 3

Practical notes

• The new floors effectively deny deductions for modest levels of giving; plan larger, less frequent gifts to clear the floor and maximize deductibility, and model the interaction with the top‑bracket 35‑cent benefit cap. 5

Additional context that can affect these deductions

Permanence of TCJA individual structure

• Rate structure and many TCJA individual provisions are made permanent, which stabilizes interactions with itemized deductions and QBI going forward. 8

State conformity implications

• Some states that conform to federal taxable income or federal estate rules will import effects of OBBB (e.g., federal estate exemption conformity in Connecticut; some may adopt new above‑the‑line charitable rules where applicable). Always verify your state’s conformity date and decoupling. 9

Sources

1 – IRC § 199A(b) 📄 Summarize
2 – One Big Beautiful Bill Act Sec. 70105. Extension and enhancement of deduction for qualified business income 📄 Summarize
3 – Tax Foundation 📄 Summarize
4 – One Big Beautiful Bill Act Sec. 70106. Extension and enhancement of increased estate and gift tax exemption amounts 📄 Summarize
5 – One Big Beautiful Bill Act Sec. 70425. 0.5 percent floor on deduction of contributions made by individuals 📄 Summarize
6 – One Big Beautiful Bill Act Sec. 70426. 1-percent floor on deduction of charitable contributions made by corporations 📄 Summarize
7 – One Big Beautiful Bill Act Sec. 70429. Adjustment of charitable deduction for certain expenses incurred in support of Native Alaskan subsistence whaling 📄 Summarize
8 – Rev. Proc. 2025-32 📄 Summarize
9 – Tax Foundation 📄 Summarize

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