‘New Round of Stimulus Checks’ — 7 Changes to 2026 Taxes You Need to Know

Core Insights - The One, Big Beautiful Bill Act (OBBBA) introduces retroactive tax breaks effective from January 1, which could lead to larger tax refunds and reduced tax bills for millions of households, resembling additional stimulus checks [1][2] Tax Changes Summary - No Income Tax on Tips: From 2025 to 2028, employees and self-employed individuals can claim a federal income tax deduction for qualified tips, with a maximum annual deduction of $25,000 [3][4] - No Tax on Overtime Pay: Starting January 1, 2025, qualifying overtime pay can be exempt from federal income tax, allowing most filers to deduct up to $12,500 or $25,000 (married filing jointly) [5] - No Tax on Auto Loan Interest: Borrowers can exclude up to $10,000 of auto loan interest from taxable income, with eligibility phased out for incomes over $100,000 ($200,000 for joint filers) [6] - Bonus Deduction for Seniors: Taxpayers aged 65 and older can claim an additional deduction of $6,000 ($12,000 for joint filers), with phase-out for modified adjusted gross income over $75,000 [7] - Higher SALT Cap: The SALT deduction cap is temporarily raised from $10,000 to $40,000, phasing out for those earning $250,000 or more, benefiting residents in high-tax states [8]