Just the Facts: What’s Changing Under the One Big Beautiful Bill Act
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces several key changes that may impact estate planning, long-term care, and tax strategy for many of our clients. At Falco & Associates, P.C., we closely monitor legislative developments to help ensure your plans are protected and up to date.
Here are the most relevant updates for our Massachusetts clients:
Medicaid Planning Changes (Effective 2027)
- Retroactive Medicaid coverage will be reduced to 2 months for most groups and just 1 month for ACA Medicaid expansion beneficiaries.
- Eligibility redeterminations will now occur every 6 months instead of once a year.
- Work requirements will apply to certain Medicaid recipients ages 19–64 (not affecting those 65+ or individuals qualifying due to disability).
These changes may impact long-term care planning and eligibility for services. Early planning remains critical to avoid coverage gaps.
Nursing Home Staffing Rules Paused (Effective Immediately)
The Secretary of Health and Human Services is now barred from implementing, enforcing, or administering federal nursing home minimum staffing and Medicaid eligibility rules until September 30, 2034.
What this means: Federal minimum staffing rules — which would have required specific numbers of nurses or aides per resident — will not be enforced or rolled out for the next nine years, unless Congress changes the law again. This may impact the quality of care in some facilities and reinforces the importance of choosing long-term care options carefully.
New Temporary Social Security Tax Deduction (2025–2028)
- Adults 65+ may benefit from a new deduction phased in for incomes up to $175,000 (single) or $250,000 (joint).
- This does not eliminate taxes on Social Security benefits, but may offer some relief for qualifying individuals.
State and Local Tax (SALT) Deduction Cap Adjusted
- From 2025–2030, the SALT itemized deduction cap increases to $40,000, phasing out between $500,000 and $600,000 in income.
- Massachusetts Pass-Through Entity (PTE) tax provisions are not affected.
Federal Estate, Gift, and Generation-Skipping Tax Exemptions Increased (Effective 2026)
- The federal exemption will increase to $15 million per person and $30 million per married couple.
- Portability remains unchanged, allowing a surviving spouse to use a deceased spouse’s unused exemption.
- Massachusetts’ exemption remains $2 million per person, with no state gift tax and no portability.
Have Questions About How These Changes Affect You?
Every client’s situation is unique. If you’d like to discuss how these changes may impact your estate plan, long-term care options, or tax strategy, please don’t hesitate to contact us. You can reach our team at Falco & Associates, P.C. or call us directly to schedule a consultation. We’re here to help you navigate every step with clarity and confidence.
