GOP tax bill: A look at the finalized brackets
House Ways and Means Chair Rep. Kevin Brady (R-Texas) addresses the media amid the release of the final GOP tax plan.
The completed version of the GOP tax bill will have seven tax brackets, according to details unveiled on Friday.
Following negotiations in both the House and the Senate, lawmakers said the rates will fall at 10%, 12%, 22%, 24%, 32%, 35% and 37%. The House had initially proposed collapsing the number of brackets into just three or four, an initiative the administration supported in an effort to simplify the tax code.
While the number of federal-income brackets remains the same, the thresholds and percentages are different. Here’s a look at the new tax brackets.
10%
This rate applies to:
Single individuals with income up to $9,525
Married couples filing jointly with income levels up to $19,050
12%
This rate applies to:
Single individuals with incomes between $9,525 and $38,700
Married couples filing jointly with incomes between $19,050 and $77,400
22%
Single individuals: $38,700 to $82,500
Married couples filing jointly: $77,400 to $165,000
24%
Single individuals: $82,500 to $157,500
Married couples filing jointly: $165,000 to $315,000
32%
Single individuals: $157,500 to $200,000
Married couples filing jointly: $315,000 to $400,000
35%
Single individuals: $200,000 to $500,000
Married couples filing jointly: $400,000 to $600,000
37%
Single individuals: $500,000 and above
Married couples filing jointly: $600,000 and above
Current rates
These are the existing rates: 10%, 15%, 25%, 28%, 33%, and 39.6%. Currently, the top rate applies to those with incomes in excess of $470,700. Plans put forth by both chambers initially included people with household incomes between $600,000 and $1 million in a 35% bracket.
Other
State and local tax deductions, otherwise known as SALT, have been a big source of controversy for Republicans throughout the tax reform debate. FOX Business confirmed on Friday that the new plan will cap state and local income and property deductions at $10,000.
The bill will also eliminate the corporate Alternative Minimum Tax (AMT) and expand the child tax credit to $2,000.
On the health care side, the new tax bill calls for the elimination of the ObamaCare individual mandate penalty.