When President Donald Trump signed the One Big Beautiful Bill (OBBB) into law last year, also known as the Working Families Tax Cuts, it was with small businesses in mind. Now, millions of job creators and entrepreneurs are feeling the full benefits of that legislation.
While the OBBB provided much-needed tax relief for small businesses, it just as crucially provided certainty regarding the future of tax policy in Washington – something that had been lacking in recent years.
Specifically, the Working Families Tax Cuts locked in section 199A of Trump’s 2017 Tax Cuts and Jobs Act, which allows pass-through businesses to deduct up to 20 percent of their qualified business income. This provision provided a major boost for business owners but was set to expire at the end of 2025.
That looming deadline forced business owners to hesitate, delaying hiring, shelving expansion plans, and holding back investment.
The OBBB changed that equation entirely. By making the 20 percent small business deduction permanent, the law removed the threat of a massive tax hike on millions of small businesses. It ensured that S-corps, LLCs, partnerships, and sole proprietors are no longer treated as temporary beneficiaries of the tax code, but as permanent drivers of the American economy.
That permanence matters because it gives business owners the confidence to plan years ahead. It also finally levels the playing field between small businesses and large corporations, which have long enjoyed permanent tax advantages.
U.S. Treasury Secretary Scott Bessent underscored just how significant the relief has been.
“For small businesses, the impact has been especially meaningful. On average, the law is reducing taxes for roughly 12 million small business owners by nearly $7,000,” Bessent said. “The permanent extension of the 20 percent Small Business Deduction alone is delivering about $4,600 in average tax relief to eight million entrepreneurs around the country.”
That is real money staying in the hands of business owners instead of the federal government. It means higher take-home income, stronger cash flow, and more flexibility to reinvest in local communities, whether through expanding operations, raising wages, or improving services.
The law also goes beyond Section 199A to reinforce a broader pro-business environment. It permanently restores 100 percent immediate expensing for research and development, unlocking innovation and encouraging companies to invest in new ideas. It increases the Death Tax exemption, protecting more than two million family-owned farms and businesses from being broken apart to satisfy federal tax burdens. And it cuts red tape by repealing Democrats’ $600 1099-K reporting threshold while raising the 1099-MISC threshold to $2,000, easing compliance burdens and opening new opportunities in the gig economy.
Bessent emphasized that these changes are already fueling investment.
“We have also taken important steps to support innovation and investment. Immediate deductibility for R&D expenses has been restored, and applied retroactively, unlocking an estimated $100 billion in prior-year deductions for tens of thousands of small businesses,” he said. “Full expensing provisions allow businesses to deduct the cost of investments upfront, improving cash flow and making it easier to move forward with growth plans.”
He also noted that the administration has “worked to reduce unnecessary administrative burdens,” eliminating millions of redundant forms and simplifying reporting requirements for both businesses and workers.
These reforms are particularly important for older Americans. Many seniors are not only retirees, but also entrepreneurs, consultants, franchise owners, and operators of family businesses. Within AMAC’s membership alone, there are roughly 130,000 small businesses. For these Americans, predictability in the tax code is not an abstract concept, but is essential to retirement planning and long-term financial security.
That is why making the 20 percent deduction permanent was a top priority for AMAC. Over the past two years, AMAC delegates traveled to Washington for fly-in advocacy events, meeting directly with lawmakers and administration officials to push for exactly this outcome. Those efforts paid off.
The Working Families Tax Cuts also delivered on several additional AMAC priorities, including broader tax relief for seniors and working Americans. According to the White House, nearly 20 million taxpayers have already claimed the “No Tax on Overtime” provision, while 4.6 million have benefited from “No Tax on Tips.” At the same time, the law reduced taxes on Social Security benefits for nearly 90 percent of recipients.
The broader economic impact is equally significant. Americans are seeing larger refunds and more money in their paychecks. The White House reports that tax refunds are up nearly 11 percent this year, with the average refund exceeding $3,700, and nearly half of all filers claiming at least one of the law’s new tax provisions.
Speaker Mike Johnson highlighted just how tangible those benefits are for everyday Americans.
“This year, taxpayers will receive $191 billion in additional refunds and have $30 billion less withheld from their paychecks — all thanks to the Working Families Tax Cuts,” Johnson said. “Real money. Real people. Make no mistake: every single Democrat voted against you getting more money in your pocket — BUT — Republicans delivered.”
For small businesses, however, the most important change is not just the size of the tax cut, but the certainty behind it. With a permanent policy in place, business owners can finally make long-term decisions with confidence, invest in their employees, and strengthen their communities without worrying about shifting political winds.
That stability is already translating into growth. And it stands as a clear example of what happens when Washington prioritizes pro-growth policy over partisan obstruction.
None of this would have been possible without sustained grassroots advocacy. AMAC members made their voices heard, and policymakers responded. The result is a tax code that finally recognizes small businesses not as an afterthought, but as the backbone of the American economy – and gives them the certainty they need to thrive.
Alan Jamison is the pen name of a political writer with extensive experience writing for several notable politicians and news outlets.
