The cap is $40,000 in 2025 and rises by 1 percent a year to 2029
What the document says“in the case of any taxable year beginning in calendar year 2025, $40,000,”
The section adds a new paragraph (7) to section 164(b) of the Internal Revenue Code of 1986 setting the applicable limitation amount at $40,000 for a taxable year beginning in 2025, $40,400 for one beginning in 2026, 101 percent of the previous year's figure for a year beginning after 2026 and before 2030, and $10,000 for a year beginning after 2029.
What the document actually says“in the case of any taxable year beginning in calendar year 2025, $40,000,”
For a tax year that begins in 2025 the figure is $40,000.
For 2026 it is $40,400. After that it grows by 1 percent a year. From 2030 it drops back to $10,000.
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