Your questions about the impact of the “Big Ugly Betrayal” on Indiana, answered

The massive spending bill passed by Congress may be big, but it’s not beautiful. It’s an ugly betrayal of the working Hoosier families who keep our state running. That’s why we’re calling it "the “Big Ugly Betrayal.”

However you call it, this bill will hurt Hoosiers of all ages across Indiana when it comes to your wallet, your health care, your education, and more.

We asked you on our social media accounts what you wanted to learn more about this bill and how it will affect Indiana. Here’s our best current answers (as of 7/10/2025) to as many of your questions as possible.

General Questions

What are the start and end dates of these cuts and provisions?  

  • Effective upon signing July 4, 2025: tax cuts, Medicaid work requirements and SNAP reforms, defense funding, border funding.  

    • In 2025, Indiana passed more stringent legislation that imposes a work or volunteer requirement of 20 hours per week, quarterly eligibility checks and monthly monitoring of internal reviews of personal information available to state agencies starting July 1. 

    • Indiana also has what is known as a "trigger law" that requires Medicaid expansion to automatically begin unwinding if federal funding for Medicaid expansion drops below 90% - meaning more services could be cut due to a loss of federal funding. 

  • Medicaid funding changes beginning in 2028, including the reduction of the provider tax, which funds the Healthy Indiana Plan. See below for more. 

  • SNAP funding changes beginning in 2028.  

  • Repeal of electric vehicle tax credits goes into effect Sept. 30, 2025. 

  • Eliminates a $3,200 tax credit for Americans making energy-improvement changes to their homes beginning in 2026. 

  • Corporations and ultra-wealthy households will see permanent tax breaks. However, working-class tax breaks like no taxes on tips start immediately but end in Dec. 2028.  

  • Student loan reform goes into effect July 2026. 

  • Child tax credit and senior deduction goes into effect in 2025. 

  • See more here: Health Provisions in the 2025 Federal Budget Reconciliation Bill 

Why does this have an impact on state-level policy? I thought this was a federal bill. 

All states, including Indiana, depend on funding from the federal government to make our budgets work. Many Medicaid programs – especially the Healthy Indiana Plan – are heavily subsidized by the federal government (as much as 90%). 

Medicaid and Medicare

 What counts as Medicaid in Indiana? 

  • Children’s Health Insurance Program (CHIP) 

  • Hoosier Healthwise

  • Healthy Indiana Plan (HIP) 

  • Hoosier Care Connect 

  • Traditional Medicaid 

  • Medicaid for Employees with Disabilities (MedConnect) 

  • Home and Community Based Support Service Waivers (HBCS) allow seniors and children with disabilities to receive care in their homes instead of institutionalization. 

  • Medicaid services in schools: This could look like services related to an Individualized Education Program (IEP), physical therapy, speech or hearing services, or applied behavior analysis therapy (ABA therapy). 

What impact will Medicaid changes have on seniors, children and the disabled who rely on this medical coverage? 

  • The Big Ugly Betrayal makes over a trillion dollars in cuts to Medicaid by shifting financial burden of Medicaid onto the backs of states and taxpayers. Indiana Medicaid enrollees could face cuts to services and longer waitlists due to the loss of federal funding. Even the privately insured will feel the squeeze of Medicaid cuts as hospitals and clinics will now have to eat the costs to provide uncompensated care for uninsured individuals. Estimates project the Big Ugly Betrayal will cost Indiana around $800 million in uncompensated care – meaning hospitals and clinics will have budgets stretched thin and face closures, provider layoffs and worsening health outcomes – particularly in rural areas. State lawmakers will have to make decisions about how the Medicaid program will continue to operate with significantly less federal funding. 

What about the work requirement provisions of the bill?  

  • Under the Big Ugly Bill, states are given until Jan. 1, 2027 to enforce the new work requirements for Medicaid enrollees. Hoosiers aged 19 to 64 need to work at least 80 hours per month to be eligible for coverage. Parents of dependents 13 and under or medically frail individuals are exempt from these requirements. Additionally, individuals must complete eligibility redeterminations twice a year instead of once a year. 

  • In 2025, Indiana passed more stringent legislation that imposes a work or volunteer requirement of 20 hours per week, quarterly eligibility checks and monthly monitoring of internal reviews of personal information available to state agencies starting July 1. 

  • Research shows that work requirements and increased eligibility checks greatly increase the cost of overseeing Medicaid because of the administrative work involved. Additionally, the majority of Medicaid recipients in Indiana and across the country either already work, are disabled, are parents of young children, or are elderly. See more here: Understanding the Intersection of Medicaid and Work: An Update 

What will be the home and community-based care impact for both the disabled and elderly?  

  • Indiana has already made cuts to HCBS services due to budgetary constraints by implementing a waitlist, which currently has 5,470 Hoosiers waiting for care. Additionally, the Pathways for Aging waiver currently has 7,895 Hoosiers on its waitlist.  With less federal funding coming to Indiana because of the Big Ugly Betrayal, it’s inevitable that the state will have to make more cuts to services, including growing waitlists and less services. Research shows that when federal funding for Medicaid decreases, states tend to cut optional benefits such as home- and community-based services (HCBS) first.   

How will this impact caregiver reimbursement rates and pay? 

  • While no specific provisions about caregiver pay are in the Big Ugly Betrayal, we can expect all Medicaid services will be under scrutiny when it comes to funding. With the Medicaid budgets that pay reimbursement for providers stretched thin, we can expect wages to remain stagnant or even decrease as patients experience increased barriers to care.  

Are there any cuts to Medicare?  

  • According to the CBO, absent future congressional action, the bill will trigger a $500 billion cut to Medicare over eight years (starting 2026) due to the Statutory Pay‑As‑You‑Go Act of 2010. 

  • The Big Ugly Betrayal prohibits the implementation of two finalized rules until October 1, 2034. that make it easier for eligible low-income Medicare beneficiaries to enroll in Medicare Savings Programs (MSPs) that lower Medicare premiums and out-of-pocket costs. These programs include: 

  •  Qualified Medicare Beneficiary (QMB) program helps Medicare enrollees with incomes below 100% of the FPL and with very limited assets by covering the costs of their Medicare Part A and B premiums and eliminating most out-of-pocket costs for Medicare-covered services. It effectively turns Medicare into a zero-cost program for the poorest enrollees.  

  • For a 65-year-old couple with Medicare coverage and a combined income of $21,000 per year, not having access to the QMB program would mean being on the hook for $4,440 annually in Medicare Part B premiums 

  • The law increases Medicare physician reimbursements by 2.5% in 2026. However, it does not include a House proposal that would tie future payment updates to the Medicare Economic Index. 

  • The law rescinds a rule providing for minimum staffing standards for nursing homes. Lowering these standards would set back efforts to ensure safe, quality care for seniors and other people who need nursing facility services. 

  • The law strips Medicare eligibility from certain groups of legal immigrants, even if they’ve worked and paid Medicare taxes for decades. This affects people with Temporary Protected Status, refugees, and asylum seekers who haven’t yet obtained green cards. 

  • The Center for Medicare Advocacy calls this unprecedented—the first time Congress has categorically eliminated Medicare eligibility for entire groups of people who have lawfully paid into the program. 

 What are the impact of these Medicaid cuts on filial responsibility laws?  

  • The Big Ugly Betrayal could increase the number of cases where filial responsibility (a.k.a. child responsibility) laws are applied. If a person using the HCBS waiver loses their Medicaid coverage, the adult children of the patient could be on the hook to cover the cost of their care.  

What impact will Medicaid cuts have on the Affordable Care Act?  

  • The Big Ugly Betrayal will make it harder to enroll and to retain coverage in the ACA marketplace.  

  • The law ends automatic re-enrollment in ACA plans.  

  • Policyholders will be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll — something more than 10 million people did this year.  

  • They’ll also have less time to enroll; the bill shortens the annual open enrollment period by about a month.  

  • People applying for coverage outside that period — for instance because they lose a job or other insurance or need to add a newborn or spouse to an existing policy — will have to wait for all their documents to be processed before receiving government subsidies to help pay their monthly premiums. Today, they get up to 90 days of premium help during the application process, which can take weeks. 

  • The CBO expects that about 4.2 million more people will be uninsured in 2034 as a result. 

  • The legislation also does not extend premium subsidies put in place during the Covid pandemic. If Congress doesn’t act, those enhanced subsidies will expire at year’s end, resulting in premiums rising by an average of 75% next year. 

  • Bars any consumer who enrolls in a plan via a non-QLE  SEP (qualifying life event special enrollment period) from receiving either premium tax credits or CSRs (cost-sharing reductions). Effective Dec. 31, 2025. 

  • Requires all tax credit payments towards care on the ACA made in excess must be repaid in full.  

  • Currently, if an individual’s estimated income is lower than their actual income, they are required to repay excessive credits. However, there is a cap on repayments for individuals who make less than 400% of the federal poverty level (FPL), those caps are now removed and individuals must repay in full. Effective date Dec. 31, 2025. 

Will any Medicaid programs be impacted more than others? (i.e., HIP) 

  • At this point, it remains unclear what steps Indiana lawmakers will take to address the loss of federal funding. Indiana has already created waitlists for services to cuts costs due to past and current budget shortfalls. 

  • Research shows that when federal funding for Medicaid decreases, states tend to cut optional benefits such as home- and community-based services (HCBS) first.   

  • Gov. Braun’s administration has already cast doubt on the future of HIP, because it is currently funded 90% by the federal government and 10% by the state. However, the state funds its 10% with a combination of a provider tax (via the Hospital Assessment Fee) and the cigarette tax. The Big Ugly Betrayal mandates that states reduce the provider tax from Indiana’s current rate of 6% starting in 2028 all the way down to 3.5%. Indiana needs to find a way to continue funding HIP at 10%, but Braun administration staff have indicated they are more interested in rolling back eligibility in the program. For a full discussion, see here.  

What lessons can we take from previous Statehouse Republican efforts to curtail Medicaid spending as we try to anticipate the impact of the Big Ugly Betrayal? 

  • Statehouse Republicans, including Govs. Braun and Holcomb, have tried to cut Medicaid costs in recent years by implementing waitlists. This allows them to technically abide by federal laws since they are not denying anyone care while practically instituting a months-long barrier to care for many Hoosiers. 

Public health and our overall health care system 

Will hospitals close as a result of this? 

  • Even people who are not on Medicaid will be affected by cuts. Many hospitals rely on Medicaid payments; without this revenue, they’re at risk of closure. This is especially risky for rural communities. Rural hospitals tend to be the only option in town, so if one closes, Hoosiers will have to drive farther to get care, regardless of if they are on Medicaid. 

Will nursing homes close or eject patients? 

  • A recent study by Brown University’s School of Public Health indicates that close to 600 nursing homes across the nation could face an increased risk of closure under the proposed Medicaid cuts. These facilities are disproportionately located in urban areas and concentrated in states already facing significant challenges.  

  • On average, 63% of residents rely on Medicaid for their long-term care, making it the single largest payer for nursing home services. 

  • Significant cuts in Medicaid will force states to make decisions about which "optional" Medicaid services they will continue to fund and how stringent Medicaid eligibility standards are to be set. Nursing home care is a mandatory benefit under Medicaid; therefore, all states would be required to continue offering it. Other services, like home and community-based service waiver programs, are not mandatory, so some states may eliminate or reduce them, while most will further restrict their availability. If this happens, there is likely to be an increase in demand for nursing home care from those who otherwise would have preferred staying at home.  

  • The bill reduces the amount states are allowed to charge for a provider tax. Indiana currently uses a 6% provider tax paid by hospitals to fund Medicaid. In 2024, the provider tax netted $1.6 billion which, in turn, was used to leverage $5.5 billion in reimbursements from the federal government. Under the Big Ugly Betrayal, states will be prohibited from implementing a provider tax over 3.5%, meaning Indiana will no longer be able to use this a a funding source for Medicaid.  

  • Additionally, if Indiana cuts more funding to home- and community-based service waivers that allow individuals to age in home, more Hoosiers will be directed to unnecessary and expensive institutional care, creating more demand for increasingly difficult-to-access nursing home care.  

  • Medicaid in Indiana is already underfunded and has been for decades. It's the reason many nursing homes are barely breaking even, especially those in rural areas. This has already led to facilities turning away residents because they have to take beds offline, hire fewer workers or worst of all, being forced to close. Closures leave seniors displaced without homes and without the around-the-clock care they need – placing undue stress on families who then have to scramble to find new care. 

How will this impact our overall health care system? 

  • Even people who are not on Medicaid will be affected by cuts. Many hospitals rely on Medicaid payments; without this revenue, they’re at risk of closure. This is especially risky for rural communities. Rural hospitals tend to be the only option in town, so if one closes, Hoosiers will have to drive farther to get care, regardless of if they are on Medicaid. 

Will Planned Parenthood be cut? 

  • The bill states that Planned Parenthood can no longer be funded with Medicaid dollars, likely leading to clinic closures. However, this provision of the bill has been temporarily blocked by a judge. 

Any impact on the cost of medications?  

  • The legislation allows more medications to be exempt from Medicare price negotiations, a change that is projected to wipe out $5 billion in savings for the federal government. Now, drug manufacturers will be able to keep those prices higher. 

  • The bill may increase out-of-pocket costs for some Medicare enrollees, especially those who rely on programs like SLMB.  

  • Some Medicare beneficiaries could see increased Part B premiums.  

  • Click here to view more information on Medicare drug cost changes. 

  • The bill does not include a "most-favored-nation" policy for drug prices - requiring drugmakers to charge no more than the lowest price paid in other wealthy nations - which is a win for drugmakers. 

Will community health centers be impacted?  

  • The Big Ugly Betrayal puts millions of Americans at risk of losing their health coverage, including patients of Community Health Centers (CHCs).  

  • CHCs provide high-quality and cost-effective primary and preventive health care to over 16 million patients insured through Medicaid.  

  • Medicaid funding is vital, and changes of this magnitude will have an immediate and devastating impact on CHC patients and the financial stability of CHCs. 

  • NACHC estimates the legislation will lead to approximately $7 billion per year in higher costs from uncompensated care for new and existing CHC patients and increased operational costs to ensure compliance with new policies. Even under normal circumstances, CHCs operate on razor-thin margins. But these are far from normal times for an essential primary care network that serves at least 10% of the U.S. population, including at least 20% in rural communities. 

How will cuts impact sexually transmitted infection screenings and HIV treatments? 

  • 40% of adults with HIV rely on Medicaid for health coverage – they will be subject to new work and eligibility reporting requirements and face the same threats to health care access created by the Big Ugly Betrayal. 

  • The most recently proposed Trump budget for 2026 – which is different from the Big Ugly Betrayal and has not been passed by Congress – almost completely slashes funding for HIV testing and prevention to the CDC. The CDC funds 91% of domestic HIV prevention efforts. The proposed cut amounts to a roughly $794 million decrease. 

  • Notably, an OMB document leaked earlier this year indicated that the administration was considering eliminating the “Ending the HIV Epidemic” (EHE) initiative, an effort created by the first Trump administration, but the final budget request retains funding for EHE (at least for accounts where funding levels are available). 

Education

What education cuts are happening?  

  • $350 billion in cuts to education (close to $300 billion of this to higher education and the student loan repayment system). 

What does this mean for K-12 education?  

  • Creates the nation’s first federal voucher program to pay for private schools, by way of a permanent and unlimited tax shelter. 

  • The Qualified Elementary and Secondary Education Scholarships—essentially a voucher program subsidizing up to $1,700 per taxpayer in private school tuition—will divert federal money to private schools at a time when the administration is proposing steep cuts to K-12 public education. (This program is optional for states.) 

  • There is no cap on the amount of dollars that may be paid out through this program, creating a significant potential cost to the federal budget.  

  • The voucher amount is still only a fraction of the average private school tuition cost in the United States, making it highly likely that it will only serve to provide a discount to families already paying for private schools but will do little to expand access to lower-income families.   

  • Medicaid cuts mean schools will struggle to get reimbursed for services and supplies for students with disabilities required by law under the Individuals with Disabilities Education Act.  

  • Medicaid is the third-largest source of funding for K–12 public schools and funds nearly 30 percent of all early intervention (IDEA Part C) for infants and toddlers with disabilities. 

  • The dual action of increasing private school funding while decreasing Medicaid funding hurts students with disabilities – private schools in Indiana are not legally required to provide disability accommodations to students. Many times, the best school for a student with a disability is their local public school, because public schools are required to provide accommodations.  

  • Restrictions in eligibility for Medicaid and SNAP will affect schools being able to draw down funding for meals.  

  • Medicaid and SNAP eligibility translates into free school meals for many children and into increased federal school lunch funding for many school districts. 

How will Medicaid and SNAP cuts impact our schools?  

  • Medicaid cuts mean schools will struggle to get reimbursed for services and supplies for students with disabilities required by law under the Individuals with Disabilities Education Act.  

  • Medicaid is the third-largest source of funding for K–12 public schools and funds nearly 30 percent of all early intervention (IDEA Part C) for infants and toddlers with disabilities. 

  • Restrictions in eligibility for Medicaid and SNAP will affect schools being able to draw down funding for meals.  

  • Medicaid and SNAP eligibility translates into free school meals for many children and into increased federal school lunch funding for many school districts. 

  • Under the SNAP changes, states are required to shoulder more of the burden in food assistance. Currently, the federal government covers 100% of the cost. Changes require some states to cover as much as 25% of the benefits cost starting in 2028, depending on each state’s “error rate.” 

  • Indiana’s 10.5% error rate puts it into the highest tier for a match rate — even though it falls below the national average rate of 11.68%. 

  • The legislation also further restricts eligibility for SNAP, requiring parents with children aged 6 and older to meet the work requirements when they were previously exempt.  

  • The SNAP changes would reduce federal spending on the program by $230 billion over 10 years. 

What does this mean for higher education?  

  • The bill puts the Pell Grant program at risk by opening it up to very-short-term programs with few meaningful guardrails. 

  • Changes include requiring students to take 9 credits (3 courses) to be eligible for any Pell grant dollars (half-time requirement) and for full-time students to increase to a 15 credit per semester course load (full-time requirement).  

  • This “half-time” requirement could result in at least 400,000 community college students losing access to any Pell grant dollars at all. 

  • Starting with the 2026-27 school year, students who qualify for a federal Pell Grant can use it for short-term workforce training. 

  • The bill would levy a tiered tax on university endowments — most of which have been historically tax-free. 

  • Many universities have pushed back against the tax, which could impose a rate ranging from 1.4% to 8% on the wealthiest colleges – money that would otherwise be used to fund student scholarships, research or building construction. 

What impact will these cuts have on student loans and borrowing?  

  • $300 billion in cuts are largely due to higher education due to changes in the student loan repayment system. 

  • Caps unsubsidized student loans at $20,500 per year and $100,000 lifetime for graduate students. 

  • Caps borrowing for professional degrees, such as those for doctors and lawyers, at $50,000 per year and $200,000 lifetime. Indiana is facing a physician shortage right now, and this will make it even worse – the IU School of Medicine’s tuition costs $60,000 for out-of-state students. How will we attract and keep doctors if students can’t finance their medical school education?  

  • Adds a lifetime borrowing limit for all federal student loans of $257,500.  

  • Going forward, there would be just two repayment plan choices for new borrowers: Student loan borrowers could enroll in either a standard repayment plan with fixed payments or an income-based repayment plan known as the Repayment Assistance Plan, or RAP.   

  • Phases out most current income-driven repayment plans by July 2026.   

  • The SAVE plan, as well as ICR and PAYE, would no longer be an option for any borrower, including those who are now in repayment under those plans.   

  • Those who are enrolled in SAVE, ICR, or PAYE would, at some point between July 2026 and 2028, have to either enroll in IBR or a new income-driven plan created by the bill called the Repayment Assistance Plan.  

  • Switching to IBR could result in significantly higher monthly payments for many borrowers, particularly those who had been repaying their student loans under PAYE or SAVE.   

  • While RAP could be more affordable for some compared to IBR, the tradeoff would be an additional 5-10 years in repayment before the borrower could qualify for student loan forgiveness.   

  • Borrowers who lose access to their current repayment plan and fail to make a selection would be forced into a Standard plan, which could be unaffordable for many.  

  • Caps parent borrowing through the federal Parent PLUS loan program at $20,000 per year per student and $65,000 lifetime;  

  • Parent PLUS borrowers who have already consolidated their loans and are currently enrolled in any income-driven repayment plan would be able to maintain access to the IBR plan.  

  • All other Parent PLUS borrowers would have one year to consolidate their loans, or they could wind up being completely cut off from income-driven repayment and any possibility of eventual student loan forgiveness.  

  • Eliminates Grad PLUS loans. These allow grad students to borrow up to their entire cost of attendance minus any federal aid.  

  • The bill also ends the unemployment deferment and economic hardship deferment.  

  • The bill slashes most of the funding allocated to the Consumer Financial Protection Bureau, a federal watchdog agency created to oversee and regulate the financial services sector, including the student loan servicing industry. 

  • Overall, these cuts will undermine Hoosiers’ ability to get ahead and make higher lifetime salaries for themselves and their families. As Ball State economist Michael Hicks has shown, the vast majority of new jobs created in Indiana over the past decade are for people with a college degree. How will low-income Hoosiers benefit from these opportunities if the cost of borrowing money for higher education keeps them locked out?  

What will be the impact of cuts on special education in our schools? 

  • Medicaid cuts mean schools will struggle to get reimbursed for services and supplies for students with disabilities required by law under the Individuals with Disabilities Education Act.  

  • Medicaid is the third-largest source of funding for K–12 public schools and funds nearly 30 percent of all early intervention (IDEA Part C) for infants and toddlers with disabilities. 

  • The dual action of increasing private school funding while decreasing Medicaid funding hurts students with disabilities – private schools in Indiana are not legally required to provide disability accommodations to students. Many times, the best school for a student with a disability is their local public school, because public schools are required to provide accommodations. 

  • Restrictions in eligibility for Medicaid and SNAP will affect schools being able to draw down funding for meals.  

  • Medicaid and SNAP eligibility translates into free school meals for many children and into increased federal school lunch funding for many school districts. 

I heard there was also separate education money that Indiana will no longer receive. 

  • Separate from the “Big Ugly Betrayal”: The administration is withholding more than $6 billion in federal grants for after-school and summer programs, English language instruction, adult literacy and more as part of a review to ensure grants align with President Donald Trump’s priorities. 

  • That money would normally go to a wide range of school programs, such as migrant education, resources for English language learners and before- and after-school learning. 

Supplement Nutrition Assistance Program (SNAP)

What SNAP changes are coming? 

  • Under the SNAP changes, states are required to shoulder more of the burden in food assistance. Currently, the federal government covers 100% of the cost. Changes require some states to cover as much as 25% of the benefits cost starting in 2028, depending on each state’s “error rate.” 

  • Indiana’s 10.5% error rate puts it into the highest tier for a match rate — even though it falls below the national average rate of 11.68%. 

  • The legislation also further restricts eligibility for SNAP, requiring parents with children aged 6 and older to meet the work requirements when they were previously exempt.  

  • The SNAP changes would reduce federal spending on the program by $230 billion over 10 years. 

How much less SNAP funding is Indiana expected to receive?  

  • The legislation also further restricts eligibility for SNAP, requiring parents with children aged 6 and older to meet the work requirements when they were previously exempt.  

  • The SNAP changes would reduce federal spending on the program by $230 billion over 10 years. 

How many people will be impacted? 

  • More than 600,000 Hoosiers received $1.44 billion in financial assistance to buy food in fiscal year 2024, mostly families with children who can’t make ends meet. 

National Debt

What are the national debt increases in this bill? How are they being financed? 

  • The nonpartisan Congressional Budget Office estimates that the Big Ugly Betrayal would pile another $3.8 trillion to the national debt.  

  • Other estimates suggest that the bill will increase our already enormous federal debt over the next 10 years by anywhere from $4 trillion to $6 trillion. 

Taxes

Who will benefit from the tax cuts in the bill the most? Do these cuts have an expiration date? 

  • Households with incomes in the top 1% were to receive an average tax cut of more than $60,000 in 2025, while households in the bottom 60% were to receive an average tax cut of less than $500. 

  • High earning households making between $460,000 and $1.1 million would benefit the most with an average tax cut of $21,000, raising their after-tax incomes by 4.4%. 

Will this impact state taxes?  

  • These tax cuts only apply to federal taxes. Indiana’s state income tax policies have not changed with the passage of the Big Ugly Betrayal. 

How does the tax break on tips work? Does the standard deduction still apply? What is the highest income for this to work?  

  • The bill allows for a deduction of up to $25,000 in tips annually from federal income taxes. 

  • Tipped workers will still pay 7.65% in payroll taxes that fund Social Security and Medicare. 

  • Eligibility starts to phase out for individuals making more than $150,000 a year, or $300,000 a year for joint filers. The deduction is reduced by $100 for every $1,000 you earn above that limit. 

  • Those who make less than the standard deduction — $15,000 in 2025 for single filers and $30,000 for joint filers — already owe no federal income tax. 

  • Two-thirds of restaurant workers who work for tips earn so little that they don't pay federal income taxes, per a 2024 report parsing data from the Census Bureau's American Community Survey. 

  • The law shouts out food service and cosmetics industry workers specifically, stressing that the tax exemption will apply "only to certain lines of business." The full list of eligible jobs will be specified by the U.S. Treasury Department and Internal Revenue Service at a later date. 

  • The law also requires workers to provide their Social Security numbers — as well as any spouses — making undocumented workers ineligible for the tax break. 

  • Deductions begin this year but are temporary and set to expire after 2028. 

Are there tax changes to Social Security income? 

  • No, the bill does not eliminate taxes on Social Security benefits. 

  • HOWEVER, the bill includes a temporary $6,000 deduction for those over age 65 and with adjusted gross incomes of $75,000 or less or $150,000 if filing as a married couple. 

  • Each spouse can take the deduction, for a total of $12,000, if both are 65-plus and meet eligibility criteria. 

  • The lowest-income seniors who already don’t pay taxes on Social Security, those who choose to claim their benefits before they reach age 65, and those above a defined income threshold could not claim the deduction. 

  • Deductions begin this year but are temporary and set to expire after 2028. 

Any changes to paying taxes on overtime?  

  • Deduction limit: $12,500 per year ($25,000 for joint filers). 

  • What can be deducted: The money a worker receives when working overtime that’s beyond their standard hourly wage. If your overtime rate is 1.5 times the regular rate, that means only the extra 50% can be deducted. 

  • Who can claim the deduction: Workers eligible for overtime compensation under the Fair Labor Standards Act. Generally, this means employees who are paid time-and-a-half for working over 40 hours a week, but there are exceptions. 

  • Deductions begin this year but are temporary and set to expire after 2028. 

Energy, environment, and transportation 

What are the clean energy and home energy efficiency impacts? 

  • Ends tax credits for electric vehicles and renewable energy (solar, wind) just 60 days after enactment (September 2, 2025), except for nuclear plants under construction by 2028.   

  • Ends tax breaks for consumers who make their homes more energy-efficient, perhaps by installing rooftop solar, electric heat pumps, or efficient windows and doors. These credits would end after Dec. 31, 2025. 

  • Amends President Biden’s Inflation Reduction Act (IRA)’s Energy Reinvestment Program by eliminating its core climate requirement that projects deliver emissions reductions. Fossil fuel operators can now use program funds to expand or convert their infrastructure with no obligation to reduce pollution or protect public health. Appropriates $1 billion in taxpayer funds. 

  • Repeals Section 134 of the Clean Air Act added by the IRA, which created the Greenhouse Gas Reduction Fund, and rescinds unobligated funding for EPA’s $27B program, which finances via green banks local clean energy and pollution-reducing projects.   

  • Projects relying on the Investment Tax Credit (ITC) under Section 48 and the Production Tax Credit (PTC) under Section 45 must begin construction within 12 months of the date of enactment of this Act to qualify. Projects placed in service after December 31, 2027, are no longer eligible for these credits.   

  • The Act also terminates the tech-neutral credits under Sections 48E and 45Y for electricity production through wind and solar facilities, effectively shifting incentives away from long-term clean energy projects.  

  • Ends the Greenhouse Gas Reduction Fund, which helps finance local emissions-reduction projects, beginning this year. Although it appears that current contracts under the program will remain in place.     

  • Eliminates civil penalties for automakers that fail to meet CAFE standards, effectively gutting the primary enforcement mechanism for reducing vehicle emissions and improving efficiency. 

  • Rescinds all unobligated IRA funding for National Oceanic and Atmospheric Administration (NOAA), including research, forecasting, climate resilience, and national marine sanctuary programs. 

  • Rescinds unobligated IRA funding for the Federal Aviation Administration, which supports development of sustainable aviation fuels and emissions-reducing technologies. 

How will this impact my utility bills? 

  • The bill is expected to increase energy costs for Hoosiers by $337 more per year due to the elimination of home energy upgrades and reduction of clean energy investments the provide energy at lower costs. The bill gives more incentives and will put more demand on increasingly expensive nonrenrewable energy sources like coal and natural gas. 

Are public lands still going to be sold off? 

  • No, that language was removed from the final version of the bill. The original Senate version of the bill would have allowed for the sale of millions of acres of public land. A large coalition of lawmakers, conservationists, and environmental groups were able to pressure Senate Republicans to remove the language.  

  • HOWEVER: 

  • The bill rescinds unobligated IRA funding for nearly the entire Forestry subtitle, including national forest restoration, grant programs for non-federal forest landowners, and forestry conservation programs. 

  • It also rescinds unobligated IRA funding for USDA conservation programs that help farmers and ranchers, including climate-smart agriculture. 

  • The bill also eliminates funds allocated for staffing and operational capacity at the National Park Service. 

  • It authorizes coal mining on federal land that is adjacent to private or state-owned coal reserves and deemed necessary for full recovery and requires the Secretary to take the steps to do so within 90 days of enactment. 

  • Requires the Forest Service to sell an annual quantity of timber that is 250 million board feet greater than the previous year, and Bureau of Land Management to sell a yearly quantity of timber that is 20 million board feet more than the prior year annually through 2034. 

  • Requires the Forest Service to enter into at least 40 long-term contracts for timber sales and the Bureau of Land Management to enter into at least five. 

  • Increases rental and capacity fees for wind and solar projects on public lands. Fossil fuel projects face no comparable cost increases. 

  • Creates a new revenue-sharing formula for wind and solar projects on public lands: 25% to states, 25% to counties, and 50% to the federal government. Unlike earlier bipartisan proposals like PLREDA, this version provides no dedicated funding for conservation, permitting improvements, or transmission planning. 

  • The bill also contains numerous provisions to expand and give tax breaks to coal mining. 

 Are there cuts to transportation and transit funding?  

  • $4.7 billion in competitive grants promised to existing, awarded grantees across the country and billions more for financing climate projects will now be rescinded following the passage of the Big Ugly Betrayal.  

  • Visit USAspending.gov to estimate how much funding had been obligated to projects and what was left to be pulled back. 

  • House Republicans voted to cancel all unspent grants from the $3.3 billion Neighborhood Access and Equity Program (94% of the program’s total funding). This program aims to help rebuild disadvantaged or underserved communities that have been torn apart by interstate highways.  

  • $20 billion is to be rescinded out of the EPA’s new climate financing program that would have dedicated funds to more efficient transportation infrastructure. 

  • The bill also repeals tax credits for the purchase of electric vehicles. 

Other

Are there election changes in this bill? 

  • No. There have been claims spread on social media that the Big Ugly Betrayal would allow the president the power to cancel elections, but that is false. See more from the Associated Press here.  

What can I do?

If you are concerned about how the provisions in this bill will affect you, your loved ones, and your community, you can reach out to our U.S. Senators Jim Banks and Todd Young as well as your congressional representative to share your thoughts. Given that many of these changes will have an outsized impact on the administration of Indiana state programs, you can contact your state legislators to share your thoughts on those (this especially applies to the future of Indiana’s Medicaid program).