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10 Tax Changes for Construction Under the Big, Beautiful Bill

Most benefits are front-loaded through 2028, meaning individuals and businesses should act now to maximize opportunities before key provisions phase out or revert

image shows tax paperwork with the word TAXES on top of them — Canva; Building Enclosure

The OBBB delivers sweeping, mostly taxpayer-friendly changes by locking in lower income tax rates, boosting standard deductions (especially for seniors), and expanding deductions for tips, overtime, and auto loan interest while also raising the SALT cap and enhancing estate and business tax breaks.

Most benefits are front-loaded through 2028, meaning individuals and businesses should act now to maximize opportunities before key provisions phase out or revert. Get with your tax professional to verify how the new changes affect you and your business.

Here is a breakdown of the top 10 tax changes for construction under the Big, Beautiful Bill.

1. 100% Bonus Depreciation Now Permanent – You can fully expense eligible equipment and property in the year of acquisition with retroactivity starting January 19, 2025.

2. Section 179 Expensing Increased – The deduction limit rises to $2.5M, phasing out when purchases exceed $4M.

3. Immediate Expensing for U.S. Production Property – Nonresidential property used in manufacturing qualifies for full depreciation if construction begins between January 20, 2025 and the end of 2028 and is placed in service by January 1, 2031 (awaiting additional IRS guidance).

4. Restore R&D Expense Deduction – Domestic research expenses are fully deductible in the year incurred; eligible small businesses may be able to amend 2022-2023 (and in some cases 2024) returns, with an election deadline of July 4, 2026.

5. Permanent 20% QBI Deduction – The pass-through business deduction is now indefinite, lowering effective top tax rates.

6. More Interest Deductions Allowed – The interest expense limit now uses EBITDA instead of EBIT, benefiting capital-heavy companies.

7. Higher SALT Cap (Temporary) – SALT deductions increase to $40K (indexed) through 2029, phasing back to $10K in 2030; high earners face gradual phase-outs.

8. Accelerated Cutoff for Green Energy Credits – Energy-efficient building deductions (179D) and home credits (45L) now expire after mid-2026.

9. Expanded Revenue Deferral for Residential Projects – Larger developments including more than four units can now defer income recognition until project completion.

10. Temporary Overtime Deduction (2025–2028) – Workers may deduct up to $12,500 ($25,000 joint) for qualifying overtime pay, subject to income phase-outs.

Trent Cotney can be reached at tcotney@cotneycl.com.

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Trent Cotney is a Partner with Adams & Reese and a Florida Bar Board Certified Construction Lawyer, licensed to practice in multiple states across the U.S. and in Canada. With nearly 25 years of experience, Trent has dedicated his career to serving the construction and roofing industries. He is a zealous advocate for the international commercial roofing sector and serves as general counsel for over 10 prominent trade associations and organizations, including the National Roofing Contractors Association (NRCA), Florida Roofing & Sheet Metal Contractors Association (FRSA), National Slate Association, Roofing Technology Think Tank (RT3), and Western States Roofing Contractors Association (WSRCA). Trent’s commitment to the industry extends beyond legal counsel; he is an active participant in education, advocacy, and innovation, working tirelessly to address the challenges contractors face and advance the industry as a whole. Known for his deep understanding of construction law and unwavering dedication, Trent Cotney remains a trusted advisor and leader in the roofing community.