New Law Sets $30 Million Estate Exclusion for Farm Couples

The One Big Beautiful Bill Act of 2025 created permanent tax provisions that shield agricultural families from immediate federal tax increases, even as Democrats took control of both the House and Senate in the November 2026 elections.

The new legislative majority will control the agenda starting in January 2027, but changing the law is not simple. President Trump retains veto power over any bill, and overriding that veto requires a two-thirds vote in both chambers. This structural check means the 2025 tax code remains the baseline unless Congress clears that high threshold.

For married couples, the estate and gift tax basic exclusion amount is now permanently set at $15 million per person, indexed for inflation. A combined $30 million exclusion allows families to transfer that amount of wealth without incurring federal estate tax. This permanent status protects families in regions where farmland values have risen sharply, even if future Democratic proposals target the exclusion.

The bill also made the 100% bonus depreciation rule permanent for qualifying property placed in service after January 19, 2025. This allows farmers to deduct the full cost of tractors, combines, and grain storage in the year they are bought. A separate provision, IRC Section 168(n), offers a special depreciation allowance for specific agricultural production facilities, provided construction begins before January 1, 2029, and the property is in service before January 1, 2031.

Income tax rates established in 2017 are now permanent, with the top bracket remaining at 37%. The standard deduction for 2026 is $32,200 for married couples filing jointly. Additionally, the qualified business income deduction under IRC Section 199A is permanent, offering pass-through businesses a deduction of up to 20% of qualified business income.

Several other deductions are temporary and expire after 2028. These include benefits for qualified tips, overtime compensation, automobile loan interest, and an additional deduction for taxpayers age 65 and older. The end of 2028 is the key planning date for these items, as Congress will decide whether to extend or modify them following the 2028 elections.

The Child Tax Credit increased to $2,200 per child in 2026, with a refundable portion of $1,700 for children under 17. New Trump Accounts offer a $1,000 federal contribution for children born between 2025 and 2028, providing a tax-advantaged savings vehicle for families.