BUSINESS TAX PROVISIONS – 2026 AND BEYOND

•  The act continues the exemption from limitation on the deduction for business meals when goods or services are sold in a bona fide transaction for adequate and full consideration (including meals for restaurant employees).  In addition, food and beverages for commercial vessel crew members and for individuals on oil or gas platforms or drilling rigs remain 100% deductible.  It was expanded to include food and beverages on certain fishing vessels or fish processing facilities.
• The employer-provided child care credit has increased from 25% to 40% of qualified expenses, extending to 50% for qualified small businesses.  The maximum credit allowed increased from $500,000 to $600,000 (adjusted annually for inflation).  Eligibility for employers able to claim the credit extends to a broader spectrum.
• The employer-provided educational assistance made permanent this tax-free employee benefit.  Employers can continue to exclude up to $5,250 annually from an employee’s taxable income for payment of student loans.  Beginning in 2027 the amount will be adjusted for inflation.
• Beginning in 2026 the provision for charitable contributions by corporations was modified so the amount must exceed 1% of taxable income and does not exceed 10% of taxable income.  Carryforwards of unused amounts must follow specified rules.
• For information reporting on Forms 1099-MISC and 1099-NEC, reporting threshold increases from $600 to $2,000 beginning in 2026.  This will be adjusted annually for inflation beginning in 2027.
• Revised provisions for the qualified small business stock gain exclusion allowed a tiered holding period of 3, 4 and 5 years with 50%, 75% and 100% gain exclusion.  It remained exempt from AMT.  The lifetime gain cap increased to $15 million, and the gross assets cap for small businesses to $75 million; both caps are adjusted for inflation beginning in 2027.
• Employers may choose how they claim the paid family and medical leave credit.  Either it is claimed based on wages paid to qualifying employees or on premiums paid for a qualifying PFML policy.  It must be coordinated with state and local PFML programs, and employees must meet certain eligibility criteria; however, no double benefit is allowed.
• Changes made to the premium tax credit include:  disqualifying certain special enrollment periods beginning in 2026, requiring recapture on all advanced payments beginning in 2027, and implementing new eligibility verification beginning in 2028.
• The repeal of various PERMANENT green energy provisions have varying effective dates from January 1, 2025, through December 31, 2007.  Those for 2026 and beyond include:
  • Clean electricity investment credit for wind and solar is disallowed after December 31, 2025.
  • Energy-efficient commercial buildings deduction is disallowed after June 30, 2026.
  • Advanced manufacturing production credit (wind components) is disallowed after December 31, 2027.
• Renewal and enhancement of opportunity zones rules and definitions were made permanent.  This included changes to low-income criteria, capital gain deferral and basis adjustments, rural investments, and annual reporting requirements.
• Amendments to the low-income housing credit were made permanent, relating to the state housing credit ceiling and tax-exempt bond financing thresholds.
• Extension of the new markets tax credit were made permanent, relating to eliminating the sunset date for NMTC allocation authority and new five-year carryforward credit limitation.
• The advanced manufacturing investment credit increased from 25% to 35%.
• Many modifications were also made to various foreign provisions and specific industry group provisions.

Click here for information on individual tax provisions for 2026 and beyond.