KPMG report: Effects on accounting for income taxes of key provisions of “One Big Beautiful Bill Act”
Exploring effects on accounting for income taxes of key corporate income tax provisions of OBBBA
The House of Representatives on May 22, 2025, passed H.R. 1 (House bill), the budget reconciliation bill known as the “One Big Beautiful Bill Act” (OBBBA) (read TaxNewsFlash). On July 1, 2025, the Senate passed its version of H.R. 1 (Senate bill), which made various amendments to the bill, including changes to the tax subtitle that was included in the House bill (read TaxNewsFlash). On July 3, 2025, the House passed the Senate bill without amendment, and the bill was signed into law by President Trump on July 4, 2025 (the Act).
The Act generally makes permanent tax provisions of the Tax Cuts and Jobs Act (TCJA). It also temporarily provides for tax benefits promised by the president for tip income, overtime pay, and auto loan interest, and introduces a host of revenue-raising provisions.
While the Act provides sweeping tax law changes, its effects on the accounting for and reporting of income taxes may be more subtle than those experienced with the reduction of the corporate income tax rate and transition tax under the TCJA. Nonetheless, the provisions within the bill are complex and may affect current and deferred taxes as well as valuation allowances.
Read a July 2025 report prepared by KPMG LLP that explores the effects on accounting for income taxes of key provisions of OBBBA.