TCJA Sunset Provisions: What High Net Worth Families Need to Know for 2026

May 11, 2026

By: Wiss Team

Wiss Team

Key Takeaways

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, permanently extended the individual tax rates, the $15 million estate and gift tax exemption (per person), and the 20% qualified business income deduction — eliminating the primary TCJA sunset risk that dominated planning conversations for three years.
High-net-worth families do not escape clean under the OBBBA: the SALT deduction cap of $40,000 phases out for modified AGI above $500,000 and reverts to $10,000 entirely in 2030, and a new rule modestly reduces itemized deductions for taxpayers in the 37% bracket.
Miscellaneous itemized deductions — including investment management fees and unreimbursed professional expenses — are permanently eliminated under the OBBBA starting in 2026.
Bottom line: The TCJA sunset many families feared largely did not occur. What replaced it is a more favorable but more nuanced tax structure that still requires a reviewed strategy for anyone with significant income, assets, or a complex estate.

For several years, the phrase “TCJA sunset” carried a specific threat for high-net-worth families: the Tax Cuts and Jobs Act of 2017 built in automatic expirations for most of its individual provisions at the end of 2025, and without new legislation, rate brackets, exemptions, and deductions were set to revert to pre-2018 law. The One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, resolved most of those concerns permanently. But permanent is not the same as unchanged, and the OBBBA introduced several provisions that require attention — especially for high-income taxpayers and families with significant estates.

What the OBBBA Made Permanent: The Core TCJA Provisions That Survived

The most consequential action of the OBBBA for individual taxpayers was converting the TCJA’s scheduled-to-expire provisions into permanent law. For high-net-worth families, the three most significant items are the individual tax brackets, the estate exemption, and the pass-through deduction.

Individual tax brackets remain at 10%, 12%, 22%, 24%, 32%, 35%, and 37%, with expanded thresholds for joint filers designed to reduce the marriage penalty. These rates are now permanent; absent further legislation, there is no scheduled reversion to the pre-2018 brackets.

The estate and gift tax exemption has been permanently set at $15 million per individual ($30 million for married couples), indexed for inflation using 2025 as the base year. This eliminates the scheduled rollback to approximately $7 million per individual that would have taken effect on January 1, 2026. For families who were accelerating gifting strategies to capture the higher TCJA exemption before it expired, the urgency has changed — though the planning opportunity remains real.

The Qualified Business Income (QBI) deduction under IRC §199A, which allows certain pass-through business owners to deduct 20% of qualified business income, is now permanently available. Business owners who structure income through S corporations, partnerships, or sole proprietorships can plan around this deduction with long-term confidence for the first time since 2017.

How the OBBBA Changes the Math for High Earners in 2026

Permanent does not mean favorable across the board. Several OBBBA provisions create specific planning considerations for the high-net-worth segment.

The SALT cap situation is temporary and heavy on phase-outs. The SALT deduction limit rose from $10,000 to $40,000 under the OBBBA, with 1% annual increases through 2029. For taxpayers in high-tax states who itemize, that is a meaningful improvement. But the cap phases out entirely for taxpayers with modified AGI above $500,000 — reducing dollar-for-dollar until it floors at $10,000. High earners in New York, New Jersey, or California with income significantly above that threshold may see limited benefit. And the cap reverts to $10,000 in 2030, making the elevated cap a temporary planning window rather than a permanent structural change.

Itemized deductions face a new reduction rule at the top bracket. The OBBBA repealed the prior Pease limitation and replaced it with a new provision that modestly reduces itemized deductions for taxpayers in the 37% bracket. The QBI deduction is specifically exempted from this reduction, but other itemized deductions are affected. High-income taxpayers who rely on a collection of itemized deductions — mortgage interest, charitable contributions, state and local taxes — should model the combined effect of this new rule against their total deduction picture for 2026.

Miscellaneous itemized deductions are permanently eliminated. Under the TCJA, investment management fees, unreimbursed business expenses, and tax preparation costs were suspended through 2025. The OBBBA makes that suspension permanent. For taxpayers whose deduction strategy included these items, they are gone for good.

The 0.5% AGI Floor on Charitable Deductions

Starting in 2026, only charitable contributions exceeding 0.5% of AGI qualify for an itemized deduction. For a taxpayer with $2 million in AGI, the first $10,000 in charitable giving no longer generates a deduction. Donors with structured annual giving programs should verify whether their contribution levels clear this new threshold and adjust accordingly.

Estate Planning Under the New Exemption: Not Simpler, Just Different

The permanent $15 million exemption removes the immediate pressure that drove many families to execute gifts and trust structures before December 31, 2025. That is a genuine change in planning posture. It does not, however, make estate planning optional.

Estates that grow meaningfully above the exemption over time will still face federal estate tax at a 40% rate. Families with closely held business interests, real estate portfolios, or other appreciating assets should model projected estate values against the inflation-adjusted exemption trajectory — not against today’s snapshot.

Trust structures established under the TCJA remain valid. Spousal Lifetime Access Trusts (SLATs), GRATs, and other vehicles executed before the OBBBA are not undone by the legislative change. Families considering these structures now have more time and less urgency, but the same long-term logic still applies for estates that will meaningfully exceed the exemption over a generation.

Getting Your 2026 Tax Position Right

The TCJA sunset story has largely concluded. What remains is a tax structure with a mix of permanent provisions, expiring features, and new rules that hit high-net-worth families in specific and sometimes counterintuitive ways.

Wiss Tax Advisory works with high-net-worth individuals and families to evaluate how the OBBBA’s provisions interact with their specific income, asset structure, and estate goals. If your estate plan, charitable giving strategy, or income tax position has not been reviewed in the context of the new law, contact Wiss to start that conversation.