Trump will sign his Big Beautiful Bill: What Kerrville families can expect

President Donald Trump will sign sweeping tax legislation Friday that will immediately boost tax credits for families with children and permanently extend lower tax rates for Kerrville area residents.

The One Big Beautiful Bill Act, which passed Congress this week by narrow margins, increases the child tax credit from $2,000 to $2,200 per qualifying child starting with 2025 tax returns filed next year.

For a typical Kerrville family with two children, that means an additional $400 annually in tax credits — money that reduces their tax bill dollar-for-dollar or increases their refund.

Immediate changes for 2025

The legislation makes several changes effective immediately:

Child Tax Credit: The credit increases to $2,200 per child under 17, up from $2,000. Families earning up to $400,000 (married filing jointly) or $200,000 (single filers) qualify for the full amount.

New Baby Accounts: Children born in 2025 through 2028 will receive $1,000 deposited into special savings accounts that can be used for education or home purchases later.

Senior Tax Break: Residents 65 and older earning less than $75,000 annually can claim an additional $6,000 standard deduction through 2028.

Tips and Overtime: Workers receiving tips can deduct up to $25,000 annually from their taxable income through 2028. Overtime pay up to $25,000 for married couples ($12,500 for singles) is also deductible.

Permanent tax changes

The bill makes permanent the individual tax rate cuts from Trump’s 2017 Tax Cuts and Jobs Act, which were set to expire at the end of 2025. Without action, taxes would have increased significantly for most families next year.

The legislation also permanently maintains the higher standard deduction — $30,000 for married couples filing jointly and $15,000 for single filers in 2025.

For families in Kerr County’s median income range of approximately $65,000, the permanent rate extensions prevent an estimated tax increase of $1,500 to $2,500 annually that would have occurred in 2026.

Local business impact

The bill permanently extends the 20% deduction for small business income, benefiting many of Kerrville’s restaurants, retail shops and service businesses along Water Street and in the downtown district.

The legislation also allows businesses to immediately write off the full cost of equipment purchases through 2029, potentially spurring investment in new machinery or technology.

State and local taxes

The cap on state and local tax deductions increases to $40,000 for five years, though this primarily benefits residents of high-tax states rather than Texas families.

Healthcare and social programs

The bill includes new work requirements for able-bodied adults receiving Medicaid, though pregnant women, children, seniors and disabled individuals are exempt. It also provides $10 billion annually for rural hospitals — potentially benefiting Peterson Regional Medical Center and other Hill Country healthcare facilities.

Environmental changes

Electric vehicle tax credits expire Sept. 30, 2025, rather than continuing through 2032. The bill also rolls back several clean energy tax incentives while expanding oil and gas lease opportunities.

Budget impact

The Congressional Budget Office estimates the legislation will increase federal deficits by approximately $3.3 trillion over 10 years. Republicans argue the economic growth from lower taxes will offset much of that cost.

The bill also raises the federal debt limit by $5 trillion to prevent a potential government default.

What’s next

Most tax changes take effect immediately for 2025, meaning Kerrville residents will see the benefits when filing their tax returns in early 2026.

Families expecting children this year through 2028 should watch for information about the new $1,000 savings accounts, which the Treasury Department will administer.

The IRS is expected to issue guidance on the new tip and overtime deductions in coming weeks.