U.S. Income Tax Policy in 2025: What’s Still in Effect

As of 2025, many parts of the U.S. tax system still reflect changes made under the Tax Cuts and Jobs Act (TCJA) of 2017. While some of those provisions are set to expire in the near future, they remain in place for the current tax year. For individuals and businesses alike, understanding which tax policies are still active can help with filing and financial planning.
The federal income tax system in 2025 continues to use a tiered structure with seven tax brackets, ranging from 10% to 37%. These rates have remained consistent since their introduction under the Tax Cuts and Jobs Act (TCJA) of 2017. The IRS adjusts the income thresholds annually to account for inflation, helping to prevent “bracket creep.”
Here are the 2025 federal tax brackets:
These rates apply only to federal income taxes. State tax systems may have their own brackets and rules.
In 2025, the standard deduction remains the primary way most taxpayers reduce their taxable income. This deduction amount is automatically applied unless you choose to itemize, which fewer people do under current tax law.
These amounts are adjusted annually for inflation. If you’re 65 or older or blind, you may qualify for an additional deduction:
Personal exemptions were eliminated under the 2017 Tax Cuts and Jobs Act and remain at $0 for the 2025 tax year. This means you cannot claim a separate exemption for yourself, your spouse, or your dependents. The higher standard deduction was intended to offset this change.
Several widely used federal tax credits remain in place for the 2025 tax year. These credits can reduce the amount of tax you owe or increase your refund, depending on your income and eligibility.
The Child Tax Credit in 2025 remains at the levels set by the Tax Cuts and Jobs Act (TCJA):
The EITC remains available to low- and moderate-income workers. The amount depends on your income, filing status, and number of qualifying children. For 2025, the maximum EITC amounts are approximately:
To claim the EITC, you must meet certain income and eligibility requirements. You can check the IRS EITC Assistant to see if you qualify.
The American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC) are still available:
These credits are subject to income limits and other eligibility rules.
The State and Local Tax (SALT) deduction allows taxpayers to deduct certain state and local taxes—such as income, property, or sales taxes—from their federal taxable income. However, a cap introduced in 2018 remains in effect for the 2025 tax year.
Unless a new bill is passed, this $10,000 limit is scheduled to expire after tax year 2025, along with several other TCJA provisions.
Taxpayers in states with high income or property taxes—such as California, New York, and New Jersey—are most impacted. The cap can significantly reduce the value of itemizing deductions for those individuals.
Several key provisions affecting business taxes remain in effect for the 2025 tax year. These rules continue to influence how corporations and small businesses calculate their tax liability.
The federal corporate income tax rate remains at 21% for 2025.
The U.S. tax code in 2025 still reflects many changes made by the Tax Cuts and Jobs Act, with current rules on tax brackets, deductions, credits, and business provisions largely intact. While some of these features are set to expire after this year, they remain active for now.
Understanding which tax policies are in effect can help individuals and businesses make informed decisions during the 2025 tax season. If you’re unsure how current rules apply to your situation, consider using trusted resources like IRS.gov or speaking with a qualified tax professional.
The content provided is intended for informational purposes only. Estimates or statements contained within may be based on prior results or from third parties. The views expressed in these materials are those of the author and may not reflect the view of National Debt Relief. We make no guarantees that the information contained on this site will be accurate or applicable and results may vary depending on individual situations. Contact a financial and/or tax professional regarding your specific financial and tax situation. Please visit our terms of service for full terms governing the use this site.
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