House Republicans on Thursday advanced a multi-trillion-dollar tax and spending package that could have sweeping impacts on household finances.

If enacted, the legislation — called the “One Big Beautiful Bill Act” — could make permanent President Donald Trump‘s 2017 tax cuts, while adding new provisions that could significantly overhaul student borrowing, health savings accounts and car ownership, among other changes.

With control of Congress, Republicans can use “budget reconciliation” to pass the package, which only needs a simple majority in the Senate. But the bill, which is more than 1,000 pages long, is likely to see changes in the upper chamber before Trump signs it into law.

Here are some of the provisions that may affect your wallet.

Enacted via the Tax Cuts and Jobs Act, or TCJA, of 2017, there’s currently a $10,000 limit on the deduction for state and local taxes, known as SALT. Filers must itemize deductions to claim it.

The bill would raise the SALT cap to $40,000 in 2025 and phase out the tax break for incomes over $500,000. The SALT limit and income phaseout would increase annually by 1% from 2026 through 2033.

Before TCJA, the SALT deduction was unlimited, but the so-called alternative minimum tax curbed the benefit for some wealthier Americans.

The bill would also reduce itemized deductions for certain taxpayers in the 37% income tax bracket, which could limit the benefit of the higher SALT cap.

“Any changes to lift the cap would primarily benefit higher earners,” Garrett Watson, director of policy analysis at the Tax Foundation, wrote in an analysis on Tuesday.

However, the plan does “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, previously told CNBC.

The reason for that is that very-low-income families with kids typically don’t owe federal taxes, which means they can’t claim the full child tax credit.

To help pay for the tax relief in the bill, House Republicans have included roughly $1 trillion in cuts to Medicaid health coverage and the Supplemental Nutrition Assistance Program, or SNAP, that are the largest in the programs’ histories.

As a result of the changes in the bill, which include stricter work requirements to qualify for the programs, 14 million individuals may lose health coverage, while 3 million households may go without food assistance, according to Accountable.US, a nonpartisan watchdog group.

While Medicaid work requirements had been slated to go into effect in 2029 per earlier versions of the proposal, House lawmakers moved that date up to December 2026 in last-minute negotiations.

Low- to middle-income seniors will be able to deduct an additional $4,000 on their tax returns, based on the terms of the House bill. The full deduction, dubbed a “bonus” in the legislation, would apply to individual tax filers with up to $75,000 in modified adjusted gross income and married couples with up to $150,000.

The tax deduction reduces the amount of seniors’ income subject to taxes, and therefore may also bring down the taxes that they owe.

The deduction is in lieu of the elimination of taxes on Social Security benefits, a proposal touted by Trump on the campaign trail. Changes to Social Security are prohibited in reconciliation legislation.

There are many provisions in the GOP bill tied to HSAs, tax-advantaged accounts used to pay for health care. They carry powerful financial benefits for those with access. 

The legislation aims to both expand households’ ability to contribute to HSAs and to use those funds without financial penalty, said William McBride, chief economist at the Tax Foundation. The HSA measures would kick in starting in 2026. 

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One tweak allows households to use HSAs to pay for expenses tied to sports and fitness, like gym memberships or instruction. Eligible expenses are capped at $500 a year for individuals and $1,000 for couples.

The bill also doubles the annual contribution limits for low and middle earners, to $8,600 for individuals and $17,100 for married couples in 2025. (This applies to individuals who make less than $75,000 per year and $150,000 for married couples.)

Trump’s tax package also includes a new savings account for children with a one-time deposit of $1,000 from the federal government.

Funded by the Department of the Treasury, “Trump Accounts” — previously known as “Money Accounts for Growth and Advancement” or “MAGA Accounts” — can later be used for education expenses or credentials, the down payment on a first home or as capital to start a small business.

If the bill passes as drafted, parents will be able to contribute up to $5,000 a year and the balance will be invested in a diversified fund that tracks a U.S.-stock index. Earnings grow tax-deferred, and qualified withdrawals are taxed at the long-term capital-gains rate.

The bill creates a tax deduction for car owners who pay interest on an auto loan, for tax years 2025 through 2028. 

The tax break is worth up to $10,000 for annual loan interest on passenger vehicles, such as a car, minivan, van, sport utility vehicle, pickup truck, motorcycle, all-terrain or recreational vehicle. It’s an above-the-line decoration, meaning taxpayers can get it even if they don’t itemize their tax deductions.

There are some restrictions: The deduction’s value starts to decrease when a taxpayer’s modified adjusted gross income exceeds $100,000, or $200,000 for married couples filing a joint tax return. Also, the car must be assembled in the U.S. to qualify for the tax break. 

The Senate unanimously passed a similar bill on Tuesday that would limit the tax break to $25,000.

The House bill would mean an early termination of tax breaks for consumers who buy or lease electric vehicles, and others for households that make their homes more energy-efficient.

Many of these credits have been available in some form for decades. The Biden-era Inflation Reduction Act extended or enhanced them. 

The House legislation would end the tax breaks after 2025, with few exceptions, about seven years earlier than under current law.

Those on the chopping block include a $7,500 tax credit for new EVs and leases, and a $4,000 credit for used EVs. 

A federal judge ordered the Trump administration on Thursday to reinstate more than 1,300 U.S. Department of Education employees.

“The Department must be able to carry out its functions and its obligations,” as well as “other relevant statutes as mandated by Congress,” U.S. District Judge Myong Joun in Boston wrote in the injunction.

The U.S. Department of Education announced a reduction in force on March 11 that would have gutted the agency’s staff by a half.

This is breaking news. Please check back for updates.

In a vote early Thursday, House members approved President Donald Trump‘s “big, beautiful” tax bill, including a new savings account for children with a one-time deposit of $1,000 from the federal government.

Under the proposal, “Trump Accounts” — previously known as “Money Accounts for Growth and Advancement” or “MAGA Accounts” — can later be used for education expenses or credentials, the down payment on a first home or as capital to start a small business.  

The final version of the bill that House Republicans passed Thursday could still face pushback in the Senate.

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If the bill passes as drafted, parents will be able to contribute up to $5,000 a year and the balance will be invested in a diversified fund that tracks a U.S.-stock index.

Sen. Ted Cruz, R-Texas, who spearheaded the effort, said the accounts give children “the miracle of the compound growth, the ability to accumulate wealth, which is transformational.”

Not unlike a 529 college savings plan, the Trump Account has a tax incentive to getting a jump start on saving. Earnings grow tax-deferred, and qualified withdrawals are taxed at the long-term capital-gains rate.

“This isn’t all that different from the tax treatment you would get from a typical brokerage account,” said Sam Taube, NerdWallet’s lead investing writer.

Other similar options already exist. Custodial brokerage accounts — often called a UTMA (Uniform Transfers to Minors Act) or UGMA (Uniform Gift to Minors Act) account — also allow parents to transfer bank deposits, stocks, bonds and mutual funds to minors. But in that case, investment income, including dividends and interest, could be subject to a “kiddie tax” charged to the parents at their rate.

With 529 accounts, alternatively, earnings grow on a tax-advantaged basis, and when a child withdraws the money, it is tax-free if the funds are used for qualified education expenses, such as tuition, fees, books, and room and board.

Although there are more limitations on what 529 funds can be applied to compared to Trump Accounts, restrictions have loosened in recent years to include continuing education classes, apprenticeship programs and student loan payments.

Plus, 529 accounts have much higher contribution limits. This year, individuals can gift up to $19,000, or up to $38,000 if you’re married and file taxes jointly, per child.

“For most parents, like myself with teens, the 529 college savings plan is superior if you’re focused on paying for higher education because of the federal tax-free growth,” said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners, based in Irvine, California.

“Also, now, the 529 is becoming more flexible with its’ ability to have unused funds rolled into a Roth IRA in the future for retirement,” said Sun, a member of CNBC’s Financial Advisor Council. 

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.

Experts say the biggest benefit of Trump Accounts is the seed money for all children born between Jan. 1, 2025, and Jan. 1, 2029, funded by the Department of the Treasury. There are no income requirements and everyone is eligible, as long as the child is a U.S. citizen, and both parents have Social Security numbers.

Although some states, including Connecticut and Colorado, already offer a type of “baby bonds” program for parents, the Trump Accounts — along with a bigger child tax credit proposed in the budget bill — “could certainly help a lot of families at a lot of different income levels,” said NerdWallet’s Taube.

Further, these accounts are not mutually exclusive from other tax-advantaged accounts, like 529 plans, he added, “so parents could take advantage of both.”

Still, for parents weighing their options for early investment vehicles, “my recommendation would be, if you’re focused on college savings, talk to an advisor and start with the 529 plan first,” Sun said. 

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