07/30/2025

Message from Beth--July 30, 2025

This week, ACEC Ohio presented a webinar with industry experts from CBIZ discussing the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025. The Act makes significant changes to the tax code, many of which offer strategic planning opportunities for engineering firms.

One of the most impactful provisions for A&E firms is the permanent reinstatement of immediate expensing for domestic R&D costs. This change, retroactive for firms with under $31 million in annual gross receipts, allows amended returns back to 2022 and accelerates deductions that were previously amortized over five years. This is a major win that ACEC has been working on for over two years.

Bonus depreciation is back at 100% for property acquired and placed in service after January 19, 2025, while Section 179 expensing limits have increased to $2.5 million, with a higher phase-out threshold. Together, these changes encourage capital reinvestment, especially for firms managing large-scale infrastructure and equipment purchases.

For pass-through entities, the Sec. 199A Qualified Business Income (QBI) deduction has been made permanent at 20% preserving a vital tax benefit for S-corporations and partnerships. In addition, C Corporations benefit from a protected 21% corporate tax rate. The bill also clarified the interest expense limitation under Section 163(j), reverting to a more favorable EBITDA-based formula beginning in 2025.

The Act also permanently extends the employer-provided education and student loan repayment benefit under Section 127, with the $5,250 annual limit now indexed for inflation—offering firms a valuable tool for recruiting and retaining talent.

From the individual tax perspective, key provisions of the 2017 TCJA have been extended or made permanent. This includes revised SALT deduction caps, higher standard deductions, and expanded overtime pay deductions—changes that will affect both firm owners and employees.

The speakers encouraged engineering firms to work closely with tax advisors to ensure they fully leverage the law’s benefits while staying compliant with its nuances.

Click here for the ACEC Overview of the OBBBA 

Click here for recording of the webinar

If you have any additional questions, please reach out to me.

~Beth