“ Excess” losses are carried forward to later tax years and can then be deducted under the net operating loss rules.
The OBBBA makes the limit permanent and reduces the threshold at which the limitation goes into effect. For 2026, the threshold is $ 256,000( down from $ 313,000 for 2025), double that amount for joint filers, and will be adjusted for inflation annually.
If you’ ll be affected by this change, consider making changes to your business strategy to avoid generating losses that would be suspended until later years because of the lower excess business loss limitation threshold.
Increased cap on the business interest deduction.
The OBBBA reverts to pre-2022 rules, limiting interest deductions to 30 % of earnings before interest, taxes, depreciation and amortization( EBITDA), instead of EBIT, with revised income ordering and foreign-income exclusions clarified. This increases your ability to deduct interest expenses for taxable years beginning in 2025 and beyond now that the calculation of“ adjusted taxable income” excludes depreciation, amortization and depletion.
This is great compliment to the new bonus depreciation rules and allows purchased assets to be debt-funded.
Note: small businesses are exempt from this limitation in 2025 if their average gross receipts over the past three years do not exceed $ 31 million. The limitation amount is increased to $ 32 million for 2026 and will be adjusted annually for inflation.
New option for the family and medical leave credit.
The OBBBA permanently extended the employer tax credit for paid family and medical leave, which was scheduled to expire on Dec. 31, 2025. For 2025, the credit amount ranged from 12.5 % to 25 % of eligible wages paid to qualifying employees for up to 12 weeks of paid leave.
Beginning in 2026, the OBBBA allows employers to claim the credit for the same percentage of insurance premiums paid or incurred during the tax year for active family and medical leave coverage.
Note: you can’ t claim the credit for both wages and premiums.
If you don’ t currently offer paid family and medical leave, consider whether funding it with insurance premiums eligible for the credit would make doing so feasible while helping to achieve other business goals, such as increasing employee retention. If you do offer paid family and medical leave, you’ ll need to look at whether claiming the credit for actual wages paid to employees on leave or for insurance premiums will save you more tax.
Elimination of certain clean energy incentives.
The Section 179D deduction for energy-efficient commercial buildings allows owners of new or existing commercial buildings to immediately deduct the cost of certain energy-efficient improvements rather than depreciate them over the 39-year period that typically applies. The base deduction is calculated using a sliding scale, ranging for 2026 from $ 0.59 per square foot to $ 5.94 per square foot, depending on energy savings and whether specific prevailing wage and apprenticeship requirements have been met. The OBBBA eliminates the deduction for property that begins construction after June 30, 2026.
08 | VIEWPOINTS: ISSUE 1 2026