How Permanent is "Permanent"?
- David H. Kinder, RFC®, ChFC®, CLU®
- Sep 21
- 2 min read
When Congress labels a tax provision as “permanent,” it often only means “for now”—because many also come with built‑in expiration dates, or can be undone by future legislative action. That reality couldn't be more evident than in the sweeping One Big Beautiful Bill (OBBB), signed into law on July 4, 2025.
Permanent simply means that it is not scheduled to change.
Of course, that doesn't mean that it won't ever change due to a new administration!
The Sunset Paradox
Sunset provisions—scheduled expiration dates—give lawmakers flexibility in balancing budgets. But they also create planning uncertainty. And the OBBB is full of them.
Key Provisions of the OBBB & Their Length
Provision | Sunset or Effective Timing |
Extension of 2017 individual tax rates | Made permanent |
SALT deduction cap raised to $40,000 | Reverts to $10,000 after five years (~2030) |
Tax-free tips and overtime deductions | Expires in 2028 |
Trump Accounts (for newborns) | Expires in 2028 |
Child tax credit increase ($200 boost) | Permanent |
1% remittance tax | Permanent |
Green energy credits (IRA-era) | Wind/solar mid‑2026/late‑2027; EV credits end 2025; hydrogen 2027 |
Bonus depreciation & R&D expensing | Temporary: 2025–2029 |
Employer-provided student loan interest exemption | Permanent beginning Jan 1, 2026 |
Estate/gift tax exemptions ($15M individual / $30M couple) | Permanent, indexed for inflation after Dec 31, 2025 |
Charitable deduction floor (0.5% of AGI) | Appears permanent |
Cap on itemized deduction benefit (35% of value) | Appears permanent after Dec 31, 2025 |
Planning in a Climate of Change
These varied timelines underscore how even dramatic tax reforms rarely guarantee permanence:
Permanent provisions, like lower rates and higher estate exemptions, offer enduring benefits—but remain vulnerable to future repeal.
Time-bound provisions, such as tip/overtime tax breaks and green energy credits, introduce fiscal cliffs that could shift financial outcomes drastically when they expire.
Strategic sunsets may delay costs and make budgets balance temporarily—but set the stage for future political fights.
Bottom Line
“Permanent” often means “until further notice.” While some OBBB tax provisions are built to last, others are intentionally short‑lived—or dependent on future legislative decisions.
For taxpayers, the message is clear:
Act now when favorable provisions are available.
Plan for uncertainty, especially around expiring tax breaks.
Monitor policy updates, particularly as key sunset dates approach (like 2028).
Build flexibility into your financial and estate planning strategies.
In the world of tax policy, permanence is more political promise than financial guarantee.
