How is Trump’s Big Beautiful Bill changing US taxes and healthcare in 2026?

EXPLAINERBig changes are coming in the new year as healthcare subsidies expire and requirements for food assistance take effect.Congress hit an impasse in 2025 over the question of whether to extend healthcare subsidies for those who purchase insurance under the Affordable Care Act [Rahmat Gul/AP Photo]Published On 31 Dec 2025Residents in the United States are set to experience significant changes to the country’s tax code, healthcare system and government benefits at the start of 2026.That’s because, on Thursday, certain provisions of President Donald Trump’s signature tax and spending package are scheduled to take effect.Recommended Stories list of 3 itemslist 1 of 3US national debt surpasses a record $38 trillionlist 2 of 3Will millions of low-income Americans lose food stamps during shutdown?list 3 of 3Can Trump dole out $2,000 tariff dividends, direct healthcare payments?end of listKnown as the One Big Beautiful Bill Act (OBBBA), the package was signed into law in July, amid bipartisan pushback.Fiscal conservatives feared it would add to the country’s deficit, while critics on the left warned that the changes it heralded would leave millions of US citizens without health insurance or food assistance.Notably, the OBBBA passed without extensions to the COVID-era healthcare subsidies that are slated to expire on Thursday.Democrats have warned that, without those subsidies, health insurance premiums purchased under the Affordable Care Act (ACA) are set to skyrocket.What changes should Americans expect heading into 2026, and how will they be affected? We break down the new policies for the start of the new year.What is the One Big Beautiful Bill Act?Even before Trump took office for a second term in January 2025, he floated the idea of creating one sweeping bill that would capture many aspects of his platform.“Members of Congress are getting to work on one powerful Bill that will bring our Country back, and make it greater than ever before,” he wrote on January 5.That idea became the foundation for the OBBBA, which Trump signed into law on July 4, the Independence Day holiday.It contains hundreds of provisions, ranging from policies that incentivise fossil fuel production to the permanent adoption of Trump’s 2017 tax cuts.Democrats, including Representative Melanie Stansbury of New Mexico, rallied against the passage of the One Big Beautiful Bill Act earlier this year, outside the US Capitol [Rod Lamkey, Jr/AP Photo]What changes are coming to the price of healthcare?Prices are set to increase for US citizens who get their health insurance through the Affordable Care Act’s marketplace, an online exchange that helps connect households and small businesses with insurance plans.The One Big Beautiful Bill Act did not extend the ACA healthcare subsidies put in place as part of the 2021 American Rescue Plan Act, under then-President Joe Biden. Those subsidies expire on December 31.“The healthcare issue is a big one because people typically have their health insurance premium deducted from their account on the first, second, or third of the month,” said Daniel Hornung, the former deputy director of the National Economic Council during the Biden administration.“So, in the next few days, we’re likely to see people in many cases have their health insurance premiums double.”Why hasn’t Congress extended the healthcare subsidies?Congress has been in gridlock over the issue of whether to extend the ACA subsidies.Democrats refused to pass budget legislation in September until Congress acted to extend the healthcare subsidies. But Republican leaders said they would only vote on the subsidies after the budget legislation was signed.That impasse led to a 43-day government shutdown, the longest in US history.The gridlock ended when a handful of Democrats broke ranks with their party members to pass the budget legislation, on the understanding that there would be a December vote to extend the subsidies.But rival proposals from Democrats and Republicans to address the subsidies both failed earlier this month.The expiration takes effect on New Year’s Day, but Congress does not return from recess until January 5.How many people will be affected by the subsidies’ expiration?Approximately 2.2 million Americans are projected to lose healthcare coverage because of the increased cost, according to analysis from the Congressional Budget Office.Hornung, the former Biden administration official, said that many more stand to be affected by healthcare premium increases.“We’re talking about roughly 20 million or so Americans who are on the ACA exchanges, either the national exchanges or the state exchanges, so that’s a major issue,” Hornung said.Critics fear changes in 2026 will reduce accessibility to programmes like the Supplemental Nutrition Assistance Program (SNAP), which provides food to low-income households [File: Kaylee Greenlee/Reuters]What are the new work requirements for federal food assistance?Under the One Big Beautiful Bill Act, there are new work requirements to qualify for Supplemental Nutrition Assistance Programme (SNAP) benefits, which help low-income households afford groceries.Able-bodied adults between the ages of 18 and 64 must now work or participate in school or a training programme for at least 80 hours per month to remain eligible.The policy applies to new applicants and renewals, beginning on January 1.For current SNAP recipients, implementation timing varies by state. Some states have already notified existing beneficiaries of the pending changes, while others will begin enforcement later. In New York, for example, the new rules are not expected to take effect until March 2026.Critics have told Al Jazeera that the new rules may place an additional burden on service-industry workers, many of whom have irregular schedules that make it difficult to guarantee 80 hours every month.How will inheritances be affected?Among the changes is an expanded estate tax exemption. Under the new policy, individuals inheriting an estate worth less than $15m are exempt from the federal estate tax. For couples, that threshold is $30m.Prior to the 2017 law, the cap for untaxed estate inheritances was about $5.5m ($7.2m in 2025, adjusted for inflation) for individuals and $11m ($14m when adjusted for inflation) for couples.Critics point out that the higher thresholds allow significant generational wealth transfers without taxation. As a result of the new provision, fewer than 1 percent of taxpayers ever face the estate tax.How will deductions change during the US tax season?January 1 will make several provisions of the 2017 Tax Cuts and Jobs Act — tax cuts enacted during Trump’s first term — permanent. Many of these provisions benefit higher-income households.One of the 2017 provisions that has been extended permits certain businesses to deduct 20 percent of their qualifying income from federal taxes.There are also changes to the deduction limits for state and local taxes (SALT).Typically, the federal government allows taxpayers to pay less in federal taxes if they can show they are paying a certain amount in income, sales and property taxes on the state and local levels.But that reduction is capped at a certain amount. Upon passage of the One Big Beautiful Bill Act, the SALT deduction cap rose from $10,000 to $40,000.That cap will increase by 1 percent to $40,400 for the 2026 tax year, with additional 1 percent increases through 2029.Opponents say those cap increases will disproportionately benefit residents in high-tax states, such as New York and California.For 2026, the OBBBA will also prompt a jump in the standard deductions for taxpayers.The standard deduction will increase by $350 for single filers, $700 for joint filers, and $525 for heads of households over the 2025 rates.For those over the age of 65, the deduction will also increase modestly by $50 for both joint and single filers, compared with last year.Then-presidential candidate Donald Trump campaigns on the slogan, ‘No tax on tips’, while speaking in Las Vegas, Nevada, on August 23, 2024 [David Swanson/Reuters]Are there any benefits for childcare?During his 2024 re-election bid, Trump made reducing childcare costs a central campaign pitch.