What is the One Big Beautiful Bill (Public Law 119-21)?
On July 4th of 2025, Congress signed the One Big Beautiful Bill Act (OBBBA) into law. The bill introduced many tax changes impacting federal individual, trust, estate and corporate taxation.
Key Features of the OBBBA:
- New tax treatment of overtime and voluntary tips (Learn more about “No tax on tips and overtime”)
- Temporary additional deduction for seniors (Learn more about additional deduction for seniors)
- Deduction for qualified car loan interest paid
- Ability to fully expense certain business property
- Ability to fully expense domestic research and experimental expenditures
- Modification of limitation on business interest
- Extension and enhancement of deduction for qualified business income
- Increased dollar limitations for expensing of certain depreciable business assets
While Massachusetts typically adopts changes to the provisions of the federal tax code, there are some exceptions to its conformity. On October 21, 2025, the Massachusetts Department of Revenue issued a Working Draft (DRAFT) of a Technical Information Release (TIR) on whether the Massachusetts tax law will conform or not to the OBBBA.
Key Differences between Massachusetts and Federal Tax Code
Massachusetts has chosen to decouple from the Internal Revenue Code (IRC) and not adopt the new tax treatment of overtime and tips, nor will it be implementing the deduction for qualified car loan interest paid. They also will not be following the full expensing of business property or the deduction for qualified business income (QBI). However, Massachusetts will be conforming to the full expensing of domestic research and development expenses and modification of limitation of business interest. Additionally, the state will follow federal provisions for many of the changes in treatment of depreciable assets, including, but not limited to, the increased dollar limitations for expensing Section 179 property and bonus depreciation for qualified production property.
Keep in mind that this TIR is issued in DRAFT form and is subject to change.
Federal and state tax codes can be complex, but it is important to understand the differences and how they affect you and your business. If you need assistance in navigating these new changes to federal and state tax laws, our team is committed to helping you prepare for the upcoming tax season and your long-term tax outlook. For guidance, please call us at (401) 921-2000 or contact us here.