Investing

In an escalating battle, the Trump administration blocked Harvard University’s ability to enroll international students and to keep current foreign students enrolled.
A federal judge in Massachusetts on Friday temporarily halted the Trump administration’s ban on international students, following a petition from Harvard to block it.
Families are “completely frantic,” said a private college consultant with clients recently accepted into Harvard’s Class of 2029.

Immediately after the Trump administration blocked Harvard University on Thursday from enrolling future international students and retaining currently enrolled foreign students, some members of next year’s freshman class started scrambling.
“I was on the phone with a parent who was visibly shaken and completely frantic,” said Christopher Rim, president and CEO of college consulting firm Command Education.

Rim, who works with a large share of international students from abroad, said a few of his clients were accepted into the Class of 2029 and committed to Harvard on May 1, also known as National College Decision Day, which was just three weeks ago.
Now, they don’t know what to do.
“This is a major moment in these students’ lives,” Rim said. “Given the circumstances and policies and laws that we have right now, we are advising these families to look into taking a gap year — hopefully by then, the Trump administration and Harvard can come to an agreement.”

An escalating legal battle

Harvard University merchandise displayed at a store in Cambridge, Massachusetts, US, on Monday, May 5, 2025.
Mel Musto | Bloomberg | Getty Images

On Thursday, the Department of Homeland Security terminated Harvard’s student and exchange visitor program certification, therefore blocking foreign students from enrolling and forcing existing foreign students to transfer or lose their legal status.
A federal judge in Massachusetts on Friday temporarily halted the Trump administration’s ban on international students, following a petition from Harvard earlier in the day calling for a reversal of the policy.

The legal battle puts Harvard international students in a “limbo state,” said Mark Kantrowitz, a higher education expert.
International students accounted for 27% of Harvard’s total enrollment in the 2024-25 academic year. That’s up from 20% during 2006-07.
Kantrowitz doesn’t expect the Trump administration to prevail in Harvard’s lawsuit, though of course it’s a possibility, he said.
More from Personal Finance:Wage garnishment for defaulted student loans to beginWhat loan forgiveness opportunities remain under TrumpIs college still worth it? It is for most, but not all
The latest move came amid an escalating standoff between the government and the Ivy League school after Harvard refused to meet a set of demands issued by the Trump administration’s Task Force to Combat Anti-Semitism.
“It is a privilege, not a right, for universities to enroll foreign students and benefit from their higher tuition payments to help pad their multibillion-dollar endowments,” Homeland Security Secretary Kristi Noem said in a statement Thursday.
In a statement on Friday, Harvard called Thursday’s action “unlawful and unwarranted.”
“It imperils the futures of thousands of students and scholars across Harvard and serves as a warning to countless others at colleges and universities throughout the country who have come to America to pursue their education and fulfill their dreams,” Harvard said.

Colleges rely on international enrollment

“It’s a shock,” said Hafeez Lakhani, founder and president of Lakhani Coaching in New York. 
“At a time when international applications — and international yield — are under pressure, this sends a signal to the rest of the world that not only is Harvard closed to the international best and brightest, but that the U.S. is not a welcome place for international students,” Lakhani said.
International enrollment is an important source of revenue for schools, which is why colleges tend to rely on a contingent of foreign students, who typically pay full tuition.
Altogether, international student enrollment contributed $43.8 billion to the U.S. economy in 2023-24, according to a report by NAFSA: Association of International Educators.
During that academic year, there were more than 1.1 million international undergraduate and graduate students in the U.S., mostly from India and China, making up slightly less than 6% of the total U.S. higher education population, according to the latest Open Doors data, released by the U.S. Department of State and the Institute of International Education.
In the 2023-24 academic year, the U.S. hosted a record number of students from abroad, marking a 7% increase from the previous year. 

Next steps for Harvard students in limbo

FILE PHOTO: People walk on the Business School campus of Harvard University in Cambridge, Massachusetts, U.S., April 15, 2025.
Faith Ninivaggi | Reuters

Kantrowitz’s advice to admitted or enrolled international students at Harvard: Start exploring your options but don’t make any sudden moves until you hear from the university.
“Harvard is going to be scrambling to deal with this, and they will issue guidance to admitted students and the enrolled students,” Kantrowitz said.
In its statement, Harvard called international students and scholars “vital members of our community.”
“We will support you as we do our utmost to ensure that Harvard remains open to the world,” it said.
Transferring to another U.S. school may have its own risks, Kantrowitz said.
“I’ve heard from [Harvard] students who are seeking to transfer,” Kantrowitz said. “But that might be jumping from the frying pan into fire. These other colleges could be targeted soon enough.”
It may also be difficult for Harvard’s incoming freshman class to transfer to another university, Kantrowitz said. Many institutions may already be at full enrollment for the coming academic year, he said.
There are currently more than 300 U.S. schools still accepting applications for prospective first-year and transfer students for the upcoming fall term, according to the National Association for College Admission Counseling.
Harvard students who require financial aid may have a tougher time transferring, depending on the university, compared to those who don’t need assistance, Kantrowitz said.
That’s because many schools use “need sensitive” or “need aware” admissions for international students, Kantrowitz said. That means they consider the student’s financial need when choosing whether to accept the student.

Already, some of Lakhani’s college-bound clients have started considering schools outside the U.S., fueled by fear about rapid policy changes, he said.
Indeed, some schools overseas are trying to woo Harvard’s international students in light of the Trump administration’s recent maneuver. The Hong Kong University of Science and Technology, for example, issued an “open invitation” to Harvard students on Friday to continue their education there, to “pursue their educational goals without disruption.”
“This sends a clear signal for the best and brightest to look elsewhere — including other countries — to thrive intellectually,” Lakhani said.
Subscribe to CNBC on YouTube. More

President Donald Trump could sign orders to support the nuclear industry as soon as Friday, sources told Reuters.
The orders would invoke the Defense Production and direct the Departments of Energy and Defense to help speed the construction of reactors.
Nuclear stocks are rallying in response.

Cooling towers are seen at the nuclear-powered Vogtle Electric Generating Plant in Waynesboro, Georgia, U.S. Aug. 13, 2024. 
Megan Varner | Reuters

Nuclear power stocks surged Friday on a report that President Donald Trump will sign executive orders to speed the construction of reactors and secure key materials for the industry.
Advanced reactor companies Oklo and NuScale jumped about 8% premarket. Constellation Energy, the largest nuclear operator in the U.S., was up 2%. Cameco Corp., one of the biggest uranium miners in the world, rose more than 4%.

Trump could sign the orders as early as Friday, sources familiar with the matter told Reuters. The president is scheduled to sign orders in the Oval Office at 1 p.m. ET, according to the White House schedule.
Trump will invoke the Defense Production Act to declare a national emergency due to U.S. dependence on Russia and China for enriched uranium, nuclear fuel processing and inputs for advance reactors, according to a draft summary viewed by Reuters.
The president is also expected to direct federal agencies to permit and site new nuclear facilities, according to Reuters. He will also order the Departments of Energy and Defense to identify federal land and facilities where nuclear can be deployed and streamline the process to build them, Reuters reported. More

House Republicans advanced a multitrillion-dollar tax and spending package that could have sweeping impacts on household finances.
The “One Big Beautiful Bill Act” extends the 2017 Trump tax cuts, slashes spending on social safety net programs such as Medicaid and SNAP and overhauls federal student loans.
The House bill adds or expands tax breaks for auto loans, tip income and health savings accounts; temporarily raises the child tax credit; and ends the EV tax credit.

House Speaker Mike Johnson speaks to the media after the House narrowly passed a budget bill forwarding President Donald Trump’s agenda at the U.S. Capitol in Washington, May 22, 2025.
Kevin Dietsch | Getty Images

House Republicans on Thursday advanced a multitrillion-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.

Higher ‘SALT’ deduction limit

Enacted via the Tax Cuts and Jobs Act, or TCJA, of 2017 is 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 Tuesday.

Bigger child tax credit

Trump’s 2017 tax cuts temporarily boosted the maximum child tax credit to $2,000 from $1,000, an increase that will expire after 2025 without action from Congress.
The House bill would make the $2,000 credit permanent and raise the cap to $2,500 from 2025 through 2028. After 2028, the credit’s highest value would revert to $2,000 and be indexed for inflation.

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 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.

Medicaid, SNAP cuts

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.

‘Bonus’ deduction for older adults

Catherine Delahaye | Digitalvision | Getty Images

Low- to middle-income adults ages 65 and up 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.
With the proposed $4,000 deduction, the average senior taxpayer with a 12% marginal income tax rate would save about $480 annually in federal income taxes, according to estimates from Richard Johnson, senior fellow at the Urban Institute.
In contrast, eliminating federal income taxes on Social Security benefits would save the average person who pays taxes on Social Security about $1,440, according to Johnson.

Health savings account expansions

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. 
More from Personal Finance:House Republican tax bill passes ‘SALT’ deduction cap of $40,000SNAP benefits face ‘biggest cut in the program’s history’ under GOP tax billSenate passed a surprise ‘no tax on tips’ bill. What it could mean for workers
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.

New ‘Trump Accounts’ for child savings

MoMo Productions | Stone | Getty Images

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 college alternative programs, 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.

Reduced student loan benefits

The bill would eliminate subsidized federal student loans, meaning that the government would no longer cover the interest on the debt while borrowers are in school or during other key periods. The change could increase a student’s loan balance at graduation by about 15%, said higher education expert Mark Kantrowitz.
While the U.S. Department of Education’s current income-driven repayment plans for student loan borrowers typically conclude in debt forgiveness after 20 or 25 years, the new GOP plan wouldn’t lead to debt cancellation for 30 years in some cases.
“A 30-year repayment term means indentured servitude,” Kantrowitz said.
The legislation would also nix the unemployment deferment and economic hardship deferment, both of which student loan borrowers use to pause their payments during periods of financial difficulty.

Car loan interest deduction

Andresr | E+ | Getty Images

The bill creates a tax deduction for car owners who pay interest on an auto loan, for tax years 2025 through 2028, but only for vehicles that are assembled in the U.S.
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 deduction, meaning taxpayers can get it even if they don’t itemize their tax deductions.
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.

Tax break on tip income

Workers who receive tips could get a tax break under the bill, which exempts qualified tips from income tax through 2028. It’s limited to those who earn less than $160,000 for 2025.
The Senate unanimously passed a similar bill on Tuesday that would limit the tax break to $25,000.

EV, clean energy tax credits 

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.  More

House Republicans on Thursday passed a bigger child tax credit as part of President Donald Trump’s multi-trillion-dollar spending package.
If enacted, the bill would make permanent the maximum $2,000 credit passed via Trump’s 2017 tax cuts, and raise the highest value to $2,500 from 2025 through 2028.
These changes wouldn’t provide relief to the lowest-earning families, policy experts say. But the provision could still change in the Senate.

Edwin Tan | Getty

House Republicans on Thursday advanced President Donald Trump’s “big, beautiful” tax and spending bill, which includes a bigger child tax credit for some families.
If enacted, the House bill would make permanent the maximum $2,000 credit passed via the Tax Cuts and Jobs Act, or TCJA, of 2017. Without action from Congress, that tax break will revert to $1,000 after 2025.

The House bill would make the highest child tax credit $2,500 from 2025 through 2028. After that, the credit’s top value would revert to $2,000 and be indexed for inflation.
More from Personal Finance:What the House Republican budget bill means for your moneyTax bill includes $1,000 baby bonus in ‘Trump Accounts’House GOP tax bill passes ‘SALT’ deduction cap of $40,000
However, the House-approved child tax credit hike wouldn’t provide relief to the lowest-earning families, according to some policy experts.
The provision could still change in the Senate.

House Republicans child tax credit changes

If enacted, the House Republican bill could provide a maximum child tax credit of $2,500 per eligible kid, starting in 2025.

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.

Typically, very-low-income families with kids don’t owe federal taxes, which means they can’t claim the full child tax credit. 
Plus, under the House proposal, both parents must have a Social Security number if filing jointly and claiming the tax break for an eligible child.
“This bill is taking the child tax credit away from 4.5 million children who are U.S. citizens or lawfully present,” Cox told CNBC.

How to calculate the child tax credit

For 2025, the child tax credit is currently worth up to $2,000 per qualifying child under age 17 with a valid Social Security number. Up to $1,700 is “refundable” for 2025, which delivers a maximum of $1,700 once the credit exceeds taxes owed.  
After your first $2,500 of earnings, the child tax credit value is 15% of adjusted gross income, or AGI, until the tax break reaches that peak of $2,000 per child. The tax break starts to phase out once AGI exceeds $400,000 for married couples filing together or $200,000 for all other taxpayers.   
“Almost everyone gets it,” but middle-income families currently see the biggest benefit, said Elaine Maag, senior fellow in the Urban-Brookings Tax Policy Center. 

A bipartisan House bill passed in February 2024 aimed to expand access to the child tax credit and retroactively boosted the refundable portion for 2023, which would have impacted families during the 2024 filing season. 
The bill failed in the Senate in August, but Republicans expressed interest in revisiting the issue.
At the time of the vote, Sen. Mike Crapo, R-Idaho, described it as a “blatant attempt to score political points.” Crapo, who is now chairman of the Senate Finance Committee, said in August that Senate Republicans have concerns about the policy, but are willing to negotiate a “child tax credit solution that a majority of Republicans can support.”
Although House Republicans previously supported the expansion for lower-earners, the current plan “shifts directions and focuses the benefits on middle and high-income families,” Maag said.  More

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

Sarah Jo Marcotte, an educator from Vermont, holds a sign that reads “Here for my students!! Cuts Hurt.” outside of the U.S. Department of Education on March 20, 2025 in Washington, DC.
Anna Moneymaker | Getty Images

‘Good news for students’

In the injunction on Thursday, the judge pointed out that the staff cuts led to the closure of seven out of 12 offices tasked with the enforcement of civil rights, including protecting students from discrimination on the basis of race and disability.

The entire team that supervises the Free Application for Federal Student Aid, or FAFSA, was also eliminated, the judge said. (Around 17 million families apply for college aid each year using the form, according to higher education expert Mark Kantrowitz.)
“This is good news for students,” said James Kvaal, who served as U.S. undersecretary of education for former President Joe Biden. “Colleges are already warning that these mass layoffs put financial aid at risk, and millions of borrowers need help avoiding loan default later this year.”
Thursday’s ruling also seemed to block the Trump administration’s goal of transferring the country’s $1.6 trillion federal student loan portfolio to the Small Business Administration from the Education Department, said Kantrowitz.
Madi Biedermann, deputy assistant secretary for communications at the Education Department, slammed the decision.
“Once again, a far-left Judge has dramatically overstepped his authority, based on a complaint from biased plaintiffs, and issued an injunction against the obviously lawful efforts to make the Department of Education more efficient and functional for the American people,” Biedermann wrote in a statement to CNBC.
She added that the Trump administration would be challenging the ruling on an emergency basis.
Former President Jimmy Carter established the current-day U.S. Department of Education in 1979. Since then, the agency has faced other existential threats, with former President Ronald Reagan calling for its end and Trump, during his first term, attempting to merge it with the Labor Department.
This is breaking news. Please check back for updates. More

President Donald Trump’s “big, beautiful” tax bill includes a new savings account for children that comes with a $1,000 deposit from the federal government.
Earnings in “Trump Accounts” grow tax-deferred, and qualified withdrawals are taxed at the long-term capital-gains rate.
A previous version of the bill called the benefits “MAGA Accounts.”
Here’s how the measure stacks up against other tax-advantaged savings plans.

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.
More from Personal Finance:House Republican tax bill passes ‘SALT’ deduction cap of $40,000SNAP benefits face ‘biggest cut in the program’s history’GOP aims to axe EV, green tax credits
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.”

How Trump Accounts work

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.

Trump Accounts vs. 529 plans

“We continue to believe that 529 plans provide tremendous benefits as a tax-advantaged savings vehicle for American families, with a proven nearly 30-year track record,” said Chris McGee, chair of the College Savings Foundation, a nonprofit that provides public policy support for 529 plans.
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 without those contributions counting toward your lifetime gift tax exemption.

“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.

Who is eligible for a Trump Account

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. 
Subscribe to CNBC on YouTube. More

There’s currently a $10,000 limit on the federal deduction on state and local taxes, known as SALT.
As part of President Donald Trump’s tax package, House Republicans on Thursday passed a SALT limit of $40,000 starting in 2025, up from $30,000 in a previous version of the bill.
However, the proposal could still change significantly in the Senate.

House Ways and Means Committee Chairman Jason Smith (R-MO) holds a news conference before a markup hearing in the Longworth House Building on Capitol Hill on May 13, 2025 in Washington, DC.
Chip Somodevilla | Getty Images News | Getty Images

House lawmakers on Thursday morning passed changes for the federal deduction for state and local taxes, known as SALT, as part of President Donald Trump’s tax package.
Enacted via the Tax Cuts and Jobs Act, or TCJA, of 2017, there’s currently a $10,000 limit on the SALT deduction, and raising that cap has been a priority for certain House lawmakers in high-tax states like New York, New Jersey and California. Filers must itemize deductions to claim the tax break for SALT.

If the House provision is enacted, the SALT cap would rise to $40,000, up from $30,000 in the previous plan, and phases out over $500,000, according to revised language released by the House Rules Committee. The provision would go into effect in 2025.
The SALT cap and income phaseout would increase annually by 1% from 2026 through 2033, according to the text.
More from Personal Finance:Senate passed a surprise ‘no tax on tips’ bill. What it could meanGOP aims to axe EV, green tax credits. Act ‘now’ to claim, experts sayTrump tariffs create the ‘perfect storm’ for financial scams
The revised text would also reduce itemized deductions for certain taxpayers in the 37% income tax bracket, which could reduce the benefit of the higher SALT cap.
For 2025, the top rate of 37% applies to individuals with taxable income above $626,350, and married couples filing jointly earning $751,600 or more.

However, the House proposal for changes to the SALT deduction could still face pushback in the Senate.

How the SALT deduction works

When filing taxes, you pick the greater of the standard deduction or your itemized deductions, including SALT capped at $10,000, medical expenses above 7.5% of your adjusted gross income, charitable gifts and others.
Starting in 2018, the Tax Cuts and Jobs Act doubled the standard deduction, and it adjusts for inflation yearly. For 2025, the standard deduction is $15,000 for single filers and $30,000 for married couples filing jointly. These could increase under the House-proposed tax bill.
Under the current thresholds, the vast majority of filers — roughly 90%, according to the latest IRS data — use the standard deduction and don’t benefit from itemized tax breaks.

Who benefits from 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.
With an income phaseout over $400,000, the top 20% of taxpayers “would be the only group to meaningfully benefit,” Watson wrote.
But members of the so-called “SALT Caucus” argue the SALT deduction limit is a middle-class issue in their districts.
Rep. Josh Gottheimer, D-NJ., co-chair of the SALT Caucus, told CNBC’s “The Exchange” on Tuesday that a full repeal of the $10,000 SALT deduction limit would be a “huge tax cut and benefit for middle-class families around the country.”     More

As lawmakers look to enact a new legislative tax package, the Supplemental Nutrition Assistance Program, or SNAP, is poised to see big cuts that experts say could put benefits at risk.
With the proposed changes, more federal food assistance beneficiaries would be subject to work requirements, while federal funding cuts would make it so states would be on the hook to pay more toward the program.

People shop at a grocery store in Brooklyn on May 13, 2025 in New York City.
Spencer Platt | Getty Images

As Republicans push forward with the “big, beautiful” tax bill, federal food assistance may see big cuts.
The Supplemental Nutrition Assistance Program, or SNAP, may be cut about 30% under the terms of the bill, which would be the “biggest cut in the program’s history,” according to Ty Jones Cox, vice president for food assistance policy at the Center on Budget and Policy Priorities.

SNAP, formerly known as food stamps, currently provides food assistance to more than 40 million individuals including children, seniors and adults with disabilities.
Yet cuts to the program proposed by the House — which would shrink the program’s funding by about $300 billion through 2034 — would put those benefits at risk.
“The House Republican plan would take away food assistance for millions who struggle to afford the high cost of groceries, including families with children and other vulnerable people with low incomes,” Cox said during a Tuesday webinar hosted by the CBPP, a progressive think tank.
The SNAP reform efforts come amid a broader effort to reduce waste and fraud in government programs. SNAP, like other government benefits, can be susceptible to improper or fraudulent payments.
The “one big, beautiful bill restores integrity to the Supplemental Nutrition Assistance Program,” House Agriculture Committee Chairman Glenn “GT” Thompson, R-Pa., said in a May 14 statement, through “long-overdue accountability incentives to control costs and end executive and state overreach.”

More from Personal Finance:What the Senate’s ‘no tax on tips’ bill means for workersWho would benefit from bigger child tax credit in House GOP billMedicaid work requirements kick hardworking people off health coverage: Senator
Many Americans cite high food costs as a top economic concern, according to an April Pew Research Center survey. If new tariff policies are put into effect, that could prompt food prices to go higher.
Moreover, the proposed SNAP cuts come as some experts say the U.S. is facing higher recession risks. In previous downturns, every additional dollar spent on SNAP generates about $1.54 in returns to the economy, according to Elaine Waxman, senior fellow at the Urban Institute’s tax and income support division.
“People spend SNAP dollars right away, and they spend them locally,” Waxman said.
The proposed SNAP cuts would largely happen by expanding work requirements to qualify for benefits and by cutting federal funding for food benefits and administration and leaving it up to states to make up the difference.

Federal cuts would leave states with tough choices

The largest cut to SNAP would come from federal funding cuts to basic SNAP benefits ranging from 5% to 25% starting in 2028, according to CBPP.
It would then be up to states to find ways to make up for that benefit shortfall, which could include making it more difficult to enroll in the program or finding other localized cuts to the program, according to CBPP.
“The change in the bill that is most dramatic is asking states to share part of the benefit cost,” Waxman said. “That’s new; since SNAP was originated, the federal government has always paid the full cost of the benefits.”
Notably, it would also mark the first time in the history of SNAP that the federal government would no longer ensure children in every state have access to food benefits, according to CBPP.

In addition, the proposal also seeks to make it so states pay a larger portion of the program’s administrative costs.
How states may react to the changes may vary. In worst-case scenarios, some states could even opt out of the program altogether, according to CBPP.
However, Waxman said most states will likely try to protect benefits because they’re “so critical,” even though they are not legally obligated to offer the program.
“The vast majority, if not all, will try to do something,” Waxman said.
In addition to the benefits SNAP provides to individuals and families, it also provides an “integral” part of economies, Waxman said. In lower-income rural areas, for example, rural grocery stores that rely on SNAP customers would see food spending go down.
“It has all these ripples that will hurt a lot of people other than just the people who are on the program,” Waxman said.

Work requirements may cost families $254 per month

House Minority Leader Hakeem Jeffries, D-N.Y., at the House Democrats’ news conference on Medicaid and SNAP cuts proposed by the Republicans’ reconciliation process.
Bill Clark | Cq-roll Call, Inc. | Getty Images

Work requirements for SNAP already make it so certain individuals must work at least 80 hours per month to qualify for the program’s benefits. That includes individuals ages 18 to 54 who are able to work and who have no dependents. Current policy also limits SNAP benefits for certain individuals to three months within a 36-month period unless work requirements are met.
The proposed legislation would expand that those work requirements, according to the Urban Institute, by:

extending the requirements to households with children, unless they have a child under age seven;
expanding the work requirements and time limits to individuals ages 55 through 64;
limiting states’ flexibility to request waivers of the work requirement policies in high unemployment areas; and
reducing discretionary exemptions from the time limits that states may provide.

Expanded work requirements would affect 2.7 million families and 5.4 million individuals, according to a new report from the Urban Institute.
That includes 1.5 million families who would lose benefits entirely and 1.2 million families who would receive lower benefits. It also includes 1.8 million people, including 48,000 children, who would lose benefits entirely; and 3.6 million people, including 1.5 million children, who would receive lower benefits, according to the Urban Institute.
Families that lose some or all their benefits would lose $254 per month on average, according to the research. Meanwhile, families with children would lose $229 per month on average, the Urban Institute found. More