House Republicans have advanced trillions of tax breaks as part of President Donald Trump‘s economic package.

After debating the legislation overnight, the House Ways and Means Committee, which oversees tax, passed its portion of the legislation on Wednesday morning in a 26-19 party line vote.

But the battle over the deduction for state and local taxes, known as SALT, remains in limbo.

The text released Monday afternoon would raise the SALT cap to $30,000 for those with a modified adjusted gross income of $400,000 or less. But some House lawmakers still want to see a higher limit before the full House vote.

While the SALT deduction is a key priority for certain lawmakers in high-tax states, the current $10,000 cap was added to help fund the Tax Cuts and Jobs Act, or TCJA, of 2017.

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Following the vote, House Ways and Means Committee Chairman Jason Smith, R-Mo., said in a statement that Ways and Means Republicans will “continue to work closely with President Trump and our House colleagues to get the One, Big, Beautiful Bill that delivers on the President’s agenda to his desk as soon as possible.”   

The full House vote could come as early as next week. But the legislation could see significant changes in the Senate, experts say.

If enacted as drafted, Republicans could also deliver no tax on tips and tax-free overtime pay. But questions remain about the details of these provisions.  

Rather than cutting taxes on Social Security, the plan includes an extra $4,000 deduction for older Americans, which may not fully cover Social Security income, according to some experts.

The $4,000 deduction costs $90 billion over 10 years, compared to $1 trillion for exempting Social Security income from tax, Garrett Watson, director of policy analysis at the Tax Foundation, wrote in a post on X Tuesday.

“Tax filers with no other income sources outside of Social Security would typically see little benefit, while others may see bigger gains from this idea,” he wrote in that thread. 

The House Ways and Means bill also extends the maximum child tax credit of $2,000 enacted via the TCJA, and temporarily raises the tax break to $2,500 per child through 2028.

However, some policy experts have criticized the proposed credit design since lower earners typically can’t claim the full amount.

The proposed legislation “did nothing for the 17 million children that are left out of the current $2,000 credit,” Kris Cox, director of federal tax policy with the Center on Budget and Policy Priorities’ federal fiscal policy division, told CNBC.

Social Security beneficiaries are at risk of receiving a smaller benefit if they’ve fallen behind on their student loans.

The Trump administration recently announced it would move to offset defaulted student loan borrowers’ federal benefits, and warned that payments could be garnished as soon as June.

That involuntary collection activity could have serious consequences on those who rely on the benefits to pay most, if not all, of their bills, consumer advocates say.

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There are some 2.9 million people age 62 and older with federal student loans, as of the first quarter of 2025, according to Education Department data. That is a 71% increase from 2017, when there were 1.7 million such borrowers, according to the data.

More than 450,000 borrowers in that age group are in default on their federal student loans and likely to be receiving Social Security benefits, the Consumer Financial Protection Bureau found.

Here’s what borrowers need to know.

The best way to avoid the offset of your Social Security benefits is to get current on your loans, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.

You can contact the government’s Default Resolution Group and pursue several different avenues to get out of default, including enrolling in an income-driven repayment plan.

“If Social Security is their only income, their payment under those plans would likely be zero,” Mayotte said.

“Markets go up and down, but students’ goals remain the same,” said Chris McGee, chair of the College Savings Foundation.

In 2024, the number of 529 plan accounts increased to 17 million, up more than 3% percent from the year before, according to Investment Company Institute.

Total investments in 529s rose to $525 billion as of December, up 11% from a year earlier, while the average 529 plan account balance hit a record of $30,961, data from the College Savings Plans Network, a network of state-administered college savings programs, also showed.

“The industry is coming off its best year ever in terms of new inflows,” said Richard Polimeni, head of education savings at ‎Merrill Lynch.

However, “in terms of the current market volatility, that creates some concern,” he added.

Even as concerns over college costs are driving more would-be college students to rethink their plans, college savings accounts are still as vital as ever.

Roughly 42% of students are pivoting to technical and career training or credentialing, or are opting to enroll in a local and less-expensive community college or in-state public school, according to a recent survey of 1,000 high schoolers by the College Savings Foundation. That’s up from 37% last year. 

As a result of those shifting education choices, 69% of students are expecting to live at home during their studies, the highest percentage in three years. 

Despite those adjustments, some recent changes have helped make 529 plans even more worthwhile: As of 2024, families can roll over unused 529 funds to the account beneficiary’s Roth individual retirement account, without triggering income taxes or penalties, so long as they meet certain requirements.

Restrictions have also loosened to allow 529 plan funds to be used for continuing education classes, apprenticeship programs and student loan payments. For grandparents, there is also a new “loophole,” which allows them to fund a grandchild’s college without impacting that student’s financial aid eligibility.

Generally, 529 plans offer age-based portfolios, which start off with more equity exposure early on in a child’s life and then become more conservative as college nears. By the time high school graduation is around the corner, families likely have very little invested in stocks and more in investments like bonds and cash. That can help blunt their losses.

Pay attention to your fund’s approach toward shifting from stocks to bonds, Morris said.

“If you are in a total stock portfolio, you may not want that ride,” she said: “You don’t want to get seasick.”

If the market volatility is still too much to bear, consider adjusting your allocation.

“One strategy is to start de-risking a portion of their portfolio and reallocate a portion into cash equivalent, which will provide a protection of principle while also proving a competitive return and peace of mind,” Polimeni said.

Still, financial experts strongly caution against shifting your entire 529 balance to cash. “The worst thing an investor can do in a down market is panic and sell investments prematurely and lock in losses,” Polimeni said.

Often that is the last resort. In the wake of the 2008 financial crisis, only 10% of investors liquidated their entire 529 accounts, and 20% switched to less risky assets, according to an earlier survey by higher education expert Mark Kantrowitz.

You can get reimbursed from your 529 plan for any eligible out-of-pocket expenses within the same calendar year. “Using that strategy gives another six to seven months for the market to recover,” Polimeni said.

Another option is to tap a federal student loan and take a qualified distribution from the 529 plan to pay off the debt down the road. However, if you’re thinking of taking out private student loans or a personal loan that starts incurring interest immediately, you may want to spend 529 funds first in that case, and defer that borrowing until later.

Once you have a withdrawal plan, you can — and should — keep contributing to your 529, experts say. Not only can you get a tax deduction or credit for contributions, but earnings will grow on a tax-advantaged basis, whether over 18 years or just a few.

“The major advantage is the tax-deferred growth, so the longer you are invested, the more tax-deferred growth you will have,” Polimeni said.

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