When will the measures in the Big Ugly Bill go into effect?

It’s clear that the budget reconciliation passed last week (The Big Ugly Bill) will have a significant impact on millions of people’s lives. However, some of the measures will go into effect in 2027, after the mid-term elections. It’s a strategy. The GOP hopes voters will forget. If the full impacts of the bill are not felt before the election, they can call all the warnings about the  budget hyperbole and convince voters not to boot them out. 

But, we won’t forget and we won’t let anyone who voted for this bill off the hook. Here’s a breakdown of the timeline. Please share and discuss with the people in your circle. 

Reconciliation Act of 2025 Implementation Timeline

Based on the information provided, here's a timeline of the implementation of specific provisions within the 2025 Reconciliation Act (also known as the "One Big Beautiful Bill Act"), as passed by the Senate on July 1, 2025, and currently under consideration by the House of Representatives. It's important to note that this is based on the current version of the bill and timelines may be subject to change as the legislative process continues. 

Immediate Implementation (Upon Enactment):

Medicaid Provisions:

• Delayed Implementation of Final Rules: The bill delays implementation of certain final rules related to streamlining Medicaid, Medicare Savings Program eligibility determination and enrollment, streamlining application and enrollment processes for Medicaid/CHIP/Basic Health Program, and minimum staffing standards for long-term care facilities, until January 1, 2035.

• Prohibition of Secretary's Authority: The bill prohibits the Secretary of Health and Human Services from implementing, administering, or enforcing nearly all provisions of the aforementioned rules from ever being implemented.

• Rollback of Nursing Home Minimum Staffing Rule: The bill rolls back the nursing home minimum staffing rule.

• Prohibition of Medicaid Funds for Family Planning/Reproductive Services: Medicaid funds cannot be used to pay providers primarily engaged in family planning services or reproductive services, effective for 10 years.

• Prohibition of Federal Matching Funds for Gender Transition Procedures: Federal matching funds for gender transition procedures for Medicaid/CHIP enrollees are prohibited. (ncsl.org and kff.org)

Implementation Starting in 2025:

Tax Provisions:

• Higher Standard Deduction: The standard deduction will be permanently boosted by $750 ($1,500 for couples).

• No Taxes on Tips and Overtime: A temporary deduction for qualified tip and overtime income will be available until 2028, with deduction caps and phase-outs based on income levels.

• State and Local Tax (SALT) Deduction Cap Increase: The SALT deduction cap will be raised to $40,000, phasing out based on adjusted gross income and reverting back to $10,000 in 2030.

• Child Tax Credit Increase: The nonrefundable portion of the Child Tax Credit will be permanently increased to $2,200 per child, adjusted for inflation after 2025.

• Bonus Deduction for Seniors: Individuals aged 65 and older will receive a new temporary bonus deduction of $6,000 per eligible filer until 2028, with phase-outs based on income.

• No Tax on Car Loan Interest: A temporary deduction of up to $10,000 for passenger vehicle loan interest will be available until 2028, phasing out based on income and requiring vehicles to be assembled in the U.S.

• Elimination of Clean Vehicle Credits: The $7,500 electric vehicle credit, along with other clean vehicle and related credits, are phased out or eliminated by specific dates in 2025 or 2026.

• Elimination of Home Energy Credits: Tax credits for rooftop solar, electric heat pumps, and other energy-efficient home devices are scheduled to end by December 31, 2025.

• Elimination of Hydrogen and Vehicle Credits: The Clean Hydrogen Production Credit and various clean vehicle credits are terminated by the end of 2025 or 2026. (New York Times)

Implementation Starting in 2026:

Medicaid Provisions: 

• Changes to Medicaid eligibility and administration, such as work requirements and more frequent eligibility checks, are set to take effect by December 31, 2026. Effective October 1, 2026, certain qualified aliens will lose Medicaid eligibility, and federal matching funds for emergency services for some individuals will be reduced. 

• States can still cover immigrant children and pregnant women with legal status from this date.

  
  

Tax Provisions: 

• Most international taxation provisions will take effect for tax years beginning after December 31, 2025. Many provisions from the 2017 Tax Cuts and Jobs Act are set to expire on January 1, 2026. 

• Permanent increases to the standard deduction, child tax credit, qualified business income deduction, and estate tax exemption begin in 2026. 

• Other tax changes in 2026 include adjustments to the Alternative Minimum Tax and a new limit on itemized deductions. Additional details can be found on Bipartisan Policy Center and Bipartisan Policy Center. 

Implementation in 2027:

Medicaid Provisions: 

• States will be required to share costs for SNAP benefits based on error rates starting October 1, 2027.

Tax Provisions: 

• The exception for de minimis commercial imports will be repealed on July 1, 2027. 

• Restrictions on accessing clean energy tax credits will apply to projects starting after December 31, 2025, if they don't meet non-FEOC content rules. The 45X Advanced Manufacturing Production Credit for wind energy components ends after December 31, 2027.

•  Further information on the elimination of transferability for several credits for construction starting after a certain date can be found at Bipartisan Policy Center. 

Implementation in 2028:

Medicaid Provisions: 

• By January 1, 2028, states must conduct frequent provider checks using the HHS termination list or another state's list, as well as quarterly checks of the Social Security Administration's Death Master File. 

• Disproportionate Share Hospital (DSH) payment reductions are delayed through September 30, 2028.

Tax Provisions: 

• Adjusted taxable income for Section 163(j) will exclude depreciation, amortization, or depletion deductions. 

• The tech-neutral clean electricity investment and production credits for wind and solar will be fully phased out, according to Bipartisan Policy Center. 

Implementation Starting in 2032:

• Tax Provisions: The phase-out of the 45X Advanced Manufacturing Production Credit will be faster, reaching 0% in 2032. The phase-out of tech-neutral clean electricity credits for other sources will also begin. Details are available on Bipartisan Policy Center and Bipartisan Policy Center. 

Other Provisions with Specific Timelines:

• Strategic Petroleum Reserve (SPR) Appropriation: $2 billion is appropriated for the SPR, available until September 30, 2029.

• Wind and Solar Projects: Projects must be in service by the end of 2027 to qualify for certain tax credits.

• Hydrogen Production Tax Credits: Clean hydrogen production tax credits are extended until 2028. 

Note: This information is based on the Senate-passed version of the 2025 Reconciliation Act and may be subject to further changes during the House consideration and enactment process. For the most up-to-date and comprehensive information, refer to official legislative sources and summaries from organizations like the Committee for a Responsible Federal Budget and Tax Policy Center. 

Photo by Aron Visuals on Unsplash