What Tax Legislation Could Hit in 2026 (Yes, an Election Year)

Election years usually slow down tax legislation. Not this one.

President Trump already passed the One Big Beautiful Bill Act this year via budget reconciliation. Now he's signaling more tax changes could be coming in 2026 before Republicans potentially lose their majority in the midterms.

Mark Luscombe, principal federal tax analyst at Wolters Kluwer, laid out what CPAs should watch in a new analysis. Here's the breakdown.

The TAS Bill (Bipartisan, Actually Moving)

The Taxpayer Assistance and Service bill is working its way through Congress with bipartisan support. Key provisions:

• Expanded digitization of tax returns

• Online account expansion for taxpayers

• Tax preparer penalties get stricter, and PTIN requirements tighten

• Mailbox rule extended to electronic filings

• Tax Court jurisdiction expanded to refund cases

• National Taxpayer Advocate gets more independence from the IRS

Parts of this could pass without budget reconciliation, meaning it doesn't need only Republican votes.

Saver's Match Kicks In 2027

SECURE 2.0 (passed in 2022) scheduled a new Saver's Match to replace the Saver's Credit starting in 2027. The government will match 50% of contributions up to $2,000, maxing out at $1,000.

Trump proposed expanding this to workers without 401(k)s through government-backed retirement accounts modeled on the federal Thrift Savings Plan.

He also floated $1,000 payments to farmers to offset tariff impacts. That was before the Supreme Court struck down his tariff authority, so the idea might be dead.

More Tax Cuts via Reconciliation

Trump said in the State of the Union he wants Congress to pass additional personal and corporate tax cuts beyond TCJA and OBBBA. He wants to use budget reconciliation again, which means passing it before the 2026 midterms in case Republicans lose control.

No details yet on what those cuts would look like or how they'd be paid for.

Tariffs to Replace the Income Tax?

Trump also mentioned (even after the Supreme Court ruling) that tariffs could substantially replace the income tax. Most analysts say that's impossible.

In fiscal 2025, the feds collected $195B in tariffs. Income tax brought in $2.6 trillion.

To make tariffs replace income tax, you'd need to raise them so high that:

• Trading partners retaliate

• Consumer prices explode

• GDP tanks

• Import volume collapses (which lowers tariff revenue)

So yeah, probably not happening.

Supplemental Spending Bill

Two things could force a supplemental spending bill:

1. Tariff refund claims. The Supreme Court ruled Trump's tariffs illegal. Now taxpayers are filing refund claims in the U.S. Court of International Trade. The government might owe up to $200B in refunds.

2. Military spending. Replacing ordnance and missile defense systems used in Iran isn't cheap. Congress may need to fund replenishment.

If a supplemental bill passes, expect fights over how to pay for it.

OBBBA Provisions Taking Effect in 2026

These don't require new legislation, but they're hitting this year:

• New charitable deduction for nonitemizers

• AGI floors on charitable deductions for itemizers and corporations

• Overall limitation on itemized deductions (eliminates 37% bracket benefit)

• Clean-energy tax break phase-outs from the Inflation Reduction Act begin

• 529 plan K-12 expenses double from $10K to $20K

• Estate and gift tax exclusion revised to $15M per person, $30M for couples

What CPAs Should Do

Election year or not, 2026 could bring more tax changes than usual. Stay close to the TAS bill. Watch for reconciliation talk in the fall. And brief clients on the OBBBA provisions hitting this year.

If Trump pushes another reconciliation bill before November, it'll move fast. Be ready.Article content for: What Tax Legislation Could Hit in 2026 (Yes, an Election Year)