Trump tax law could help millions of Americans pay $0 in federal income tax. Who qualifies and how to get it in 2026

Moneywise and Yahoo Finance LLC whitethorn gain committee oregon gross done links successful the contented below.

President Donald Trump’s caller taxation measure cuts the income taxation liability for galore Americans.

Altogether, astir 40% of U.S. households could wage $0 successful national income taxation successful 2025, according to the Tax Policy Center (1).

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Similarly, 40% of households had a $0 national taxation measure successful 2022, nether the Biden administration. However, Trump’s taxation cuts favour circumstantial groups, which means immoderate Americans whitethorn extremity up with a $0 taxation measure for the archetypal clip successful 2025 (2).

Here’s a person look astatine who volition travel retired ahead.

Trump’s One Big Beautiful Bill Act (OBBBA) specifically favors seniors, employees earning tips and overtime, and those with children.

Here’s an example: Casey and Riley gain a combined income of $100,000 and person 2 children nether the property of 13. Their accustomed deductions let them to little their taxable income considerably, with $31,500 successful modular deductions, $6,800 successful 401(k) contributions, $6,800 for wellness security premiums, $1,260 for a Health Flexible Spending Account (FSA) and $3,000 for a Dependent Care Flexible Spending Account (DCFSA).

But the caller measure adds different deduction to this list: overtime pay. Casey and Riley tin deduct an further $10,000 due to the fact that of this.

After each deductions and subtractions from their full income, they nett retired astatine $40,640, leaving them with a $4,400 taxation liability. However, Casey and Riley could besides person the maximum kid taxation recognition of $2,200 per child, which is up from $2,000 past year. The combined taxation recognition of $4,400 would offset the magnitude they beryllium successful taxes and permission them efficaciously with a $0 national taxation bill.

Similarly, a retired mates who are some 66 years aged and earning a combined adjusted gross income of $96,700 could trim their taxable income by $34,700 nether the existing modular deduction. The OBBBA’s caller seniors deduction, worthy $6,000 each oregon $12,000 together, decreases their combined taxable income to $50,000 (3).

Because the remaining $50,000 is derived from superior gains and qualified dividends, it would beryllium taxable to a 0% taxation complaint (4). All successful all, the elder mates could wage $0 successful national income tax.