When Does the Big Beautiful Bill Start? Full Timeline and First Changes Explained

Wondering when the Big Beautiful Bill actually kicks in? Here’s the full timeline, key dates, and what each stage means for your paycheck, taxes, and benefits. Signed into law by President Donald Trump on July 4, 2025, the One Big Beautiful Bill Act features a staggered rollout designed to ease compliance for businesses and to give federal agencies time to update systems. July 4 – Dec 31, 2025: “Immediate-impact” provisions • 0 % federal income tax on overtime pay begins right away, covering July Fourth holiday shifts and every extra hour worked after that. • Standard deduction rises to $25,000 for single filers and $50,000 for joint filers; employers can adjust withholding as early as the first full pay period after July 15. • Child Tax Credit permanently jumps to $3,000 per child under 17. Jan 1, 2026: “New-year reset” provisions • Tip income becomes tax-free up to $20,000 a year, a change that restaurants and bars must reflect in payroll reports starting with the first 2026 paycheck. • Social Security earnings cap is removed for taxpayers earning under $135,000, trimming FICA withholdings for roughly 40 million workers. • Corporate tax rate drops from 21 % to 17 %, but only for firms that keep 90 % of their workforce on U.S. soil. April 15, 2026: “Filer-friendly” changes • For the 2025 tax year you’ll file in April 2026, the IRS introduces a postcard-length return for anyone earning under $400 k. • Electronic filing becomes free for all taxpayers through a revamped IRS Direct File portal. July 1, 2026: Infrastructure surcharge kicks in • A 1 % national sales surcharge on luxury goods (cars over $80k, jewelry over $10k) funds the $12.5 billion air-traffic-control modernization program spelled out in the bill. Oct 1, 2026: Health-care offsets • Medicare Part B premiums fall by an average of $22 a month, financed by the luxury-goods surcharge and a new bulk-drug-buying plan negotiated by HHS. Dec 31, 2027: Sunset check • Unless Congress votes to extend them, the overtime-tax exemption and tax-free tips expire at the end of 2027; a bipartisan review commission must report cost-benefit findings by July 2027. Why the phased start? Administration officials say the goal is to let employers update payroll software in waves while giving taxpayers “instant relief where it matters most—paychecks and family budgets.” Economists also note that delaying corporate-rate cuts until 2026 prevents a sudden revenue shock in FY 2025 while still offering businesses a clear path for planning investments. How to prepare right now • Check your first post-July 15 paystub to confirm overtime tax withholding is zero. • Expect revised W-4 forms from employers in early August. • If you rely heavily on tips, set reminders for Q1 2026 estimated-tax deadlines to avoid over-paying before the exemption kicks in. • Watch for IRS guidance on the postcard return later this fall; software providers say beta versions will appear in October. Bottom line The Big Beautiful Bill starts in stages, but the biggest wallet-boosters—no tax on overtime, higher standard deductions, and a larger Child Tax Credit—land this year. Mark the calendar for January 1 and April 15 next year for the second wave of changes, and keep an eye on 2027 when Congress revisits the temporary breaks.