The One Big Beautiful Bill Act (OBBBA), signed by President Donald Trump into law on July 4, is a sweeping tax and spending package with significant implications for Asian Americans. With nearly 25 million people and over 3 million businesses in the country, the community faces both opportunities and challenges from the landmark legislation.
For business owners and workers
The law permanently extends the 2017 Tax Cuts and Jobs Act (TCJA) provisions, which include lower tax rates and increased standard deductions that have been in place since 2018. This could provide stability for Asian American business owners, who represent a substantial share of entrepreneurs nationwide. For one, Asian Americans own a large portion of hotels — estimated at 60% — and the tax incentives for business investments and property improvements are expected to support these companies and their employees.
Many Asian Americans also own small businesses across diverse sectors. Under the OBBBA, the 20% qualified business income (QBI) deduction for pass-through entities becomes permanent — with an increase to 23% starting 2026 — easing tax burdens for entrepreneurs. The law also raises the Section 179 expensing limit to $2.5 million, allowing immediate deductions for equipment and property investments. Enhanced employer-provided childcare tax credits increase the maximum credit to $500,000 and raise the reimbursement rate to 50%, potentially helping small businesses better attract and retain workers.
The OBBBA also introduces new tax breaks for working Americans, including:
- Federal income tax deductions on tips and overtime pay for individuals earning under $150,000, benefiting many Asian American workers in service industries
- A doubled child tax credit of $2,500 per child through 2028, providing greater financial relief to families. This is especially meaningful given that Asian Americans have about 4 million children under 18.
- Temporary increase of the SALT (state and local tax) deduction cap to $40,000 through 2029, which can benefit Asian American homeowners in high-tax states like California and New York
- “Trump Accounts,” or new tax-exempt savings accounts for children born between 2025 and 2028, provide a $1,000 seed deposit (with up to $5,000 per year in tax-deferred contributions), helping families save for future education expenses.
For vulnerable populations
Despite these benefits, the legislation enacts deep cuts to social safety-net programs critical to many low-income and immigrant Asian Americans:
- Medicaid funding is cut by approximately $930 billion over 10 years, threatening healthcare access for an estimated 17% of Asian Americans who rely on the program.
- Supplemental Nutrition Assistance Program (SNAP) faces around $186 billion in cuts and new work requirements, which could impact more than 1 million Asian Americans that receive food assistance benefits.
- Asian Americans make up around 6% of students in community colleges, where new Pell Grant restrictions and part-time aid cuts may hit hardest. Loan caps and the end of Grad PLUS could further limit students’ ability to pursue advanced degrees in medicine, law and other high-cost fields.
- A new 1% tax on offline international remittances threatens to burden immigrant families sending essential support abroad. For recipients in Asia — especially India, which receives $32 billion annually from the U.S. — this added cost could reduce crucial funds that households depend on for daily living, education and healthcare.
The law also allocates a $170 billion funding for immigration enforcement and border security. This raises concerns not only among Asian nationals who are in the country on student and work visas, but among naturalized citizens who could also be detained and processed for removal.
Asian American lawmakers and advocacy groups have denounced the legislation. For one, Asian Americans Advancing Justice warned that it directly attacks not only immigrant communities, but all Americans who rely on the impacted programs to survive. “We need laws that invest in opportunities and our future — that uplift families and the most vulnerable, not laws that cater to the mega-rich and funnel resources into systems of exclusion and cruelty,” the group said.
This story is part of The Rebel Yellow Newsletter — a bold weekly newsletter from the creators of NextShark, reclaiming our stories and celebrating Asian American voices.
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