Federal Impacts 2025

After an intense overnight session, the US House of Representatives narrowly passed the "One Big Beautiful Bill Act" with a 215-214 vote, marking a significant milestone in fiscal policy reform. The bill, which now heads to the Senate for further consideration, proposes extensive tax changes alongside broader regulatory shifts. While House Republicans and the current administration champion the bill as a legislative victory, Democratic opposition remains strong, and modifications are expected before it reaches the president’s desk.

Major tax provisions

At the heart of the legislation is a sweeping restructuring of federal tax policy. The bill seeks to permanently extend key tax cuts from 2017, while also introducing temporary incentives aimed at stimulating economic growth.

• Locking in individual and estate tax cuts.
• Tax reductions from the 2017 Tax Cuts and Jobs Act (TCJA) will become permanent, preventing their previously scheduled expiration.
• The estate tax exemption will rise to $15 million, adjusted for inflation, allowing high-net-worth individuals to transfer wealth with fewer tax burdens.

Temporary benefits for workers and families (expiring in 2028)

Acknowledging the financial pressures facing American households, the bill introduces several temporary tax incentives:

• Exemptions on tips and overtime compensation, providing relief to service workers and those reliant on extra income.
• Tax-exempt status for interest on specific US-assembled automobile loans, potentially lowering borrowing costs.
• An increase in the standard deduction: an additional $1,000 for individual filers ($16,000 total) and $2,000 for joint filers ($32,000 total).
• A boost to the child tax credit, raising it by $500 to $2,500 per child for tax years 2025 through 2028.

Expanding deductions for high-tax states

One of the bill’s most anticipated revisions is its adjustment of the state and local tax (SALT) deduction cap:

• The cap will increase from $10,000 to $40,000 for households with adjusted gross incomes up to $500,000, alleviating tax burdens in high-tax states.
• For higher-income earners, the deduction gradually phases down, limiting revenue losses for the federal government.

Business tax reforms and incentives

Businesses are among the biggest beneficiaries of this legislation, with several key tax advantages aimed at stimulating investment and innovation.

Encouraging capital investments

• The bill restores 100% bonus depreciation for eligible assets acquired between January 20, 2025, and 2029, allowing businesses to fully deduct the cost upfront.
• The Section 179 deduction cap is raised to $2.5 million, encouraging companies to reinvest in equipment and infrastructure.
• Pass-through entities will see a qualified business income (QBI) deduction increase from 20% to 23%, reducing tax liabilities for small business owners.

Modernizing research and development (R&D) tax treatment

To foster innovation, the legislation reshapes R&D deductions:

• Businesses investing in domestic research can either deduct costs immediately or amortize them over 60 months.
• Foreign R&D costs remain unchanged, reflecting concerns about outsourcing innovation.

More favorable business interest deductions

Under IRC Section 163(j), companies can now add back depreciation, amortization, and depletion when calculating limits on interest deductions, helping firms that rely on capital financing.

Controversial provisions and policy shifts

While many business owners welcome the tax incentives, other aspects of the bill have sparked debate—particularly those affecting environmental initiatives and international taxation.

Scaling back clean energy tax credits

Several clean energy tax credits from the Inflation Reduction Act (IRA) are now subject to elimination or accelerated phase-out.

• Supporters argue that this move reduces unnecessary subsidies.
• Environmental groups warn that these rollbacks could slow the transition to renewable energy and discourage green investments.

Targeting "unfair foreign taxes"

A new provision, Proposed Section 899, is designed to address foreign tax policies:

• It imposes higher US tax rates on individuals from nations that impose restrictive or unfair taxes on American citizens or corporations.
• Critics view this measure as potentially fueling trade tensions and diplomatic disputes.

Excise tax on remittances

A 3.5% excise tax will now apply to remittances sent by non-US citizens to family members abroad.

While proponents frame this as a revenue-generating strategy, opponents argue that it disproportionately affects immigrant communities.

What happens next?

As the bill moves to the US Senate, its fate remains uncertain. While Republicans tout its provisions as an economic boost, Democratic lawmakers continue to scrutinize its potential effects on income inequality, environmental sustainability, and trade relations.

Taxpayers—whether individuals or businesses—should pay close attention as amendments emerge. With negotiations underway, the final legislation could see additional revisions, altering tax credits, deductions, and corporate incentives.

For now, those impacted by the bill should begin assessing how these provisions align with their financial strategies, preparing for potential tax shifts in the coming years.

BerryDunn's tax consulting and compliance team brings deep experience and extensive resources to each client’s unique tax situation. We work closely with you to develop comprehensive, coordinated strategies to ensure tax compliance, limit exposure, and optimize performance. Learn more about our team and services. 

Read this if you work in management at a higher education institute or another nonprofit organization. 

On May 5, 2025, the US Department of Education (ED) issued a Dear Colleague Letter (DCL) to higher education institutions. The DCL outlined current default rates for federal student loans and the expected impact on these rates with the resumption of collection efforts on defaulted loans. ED suspended collection efforts on these loans in March 2020 to help combat the economic crisis created by the COVID-19 pandemic. According to ED, an estimated 25% of individuals currently in repayment are in default or significantly delinquent. It’s important to take a closer look at the impact increased default rates could have on higher education institutions and other nonprofit organizations, and how to remain compliant. 

Impact on higher education institutions 

Federal regulations require higher education institutions to track and maintain low cohort default rates (CDR). If an institution has a CDR higher than 40% in a single year or exceeds 30% for three consecutive years, the institution will lose their eligibility to receive federal student assistance. ED’s resumption of collection efforts on defaulted federal student loans is expected to increase institutions’ CDR.  

The DCL emphasizes the role institutions play in contacting former students to remind them of their responsibility to repay their federal student loans. If an institution were to become ineligible to receive its annual federal student assistance, funding would severely impact the institution’s ability to continue operations.  

The CDR regulation is three years in arrears, which means the 2026 default rate will include students who entered into repayment in 2023. Based on this, institutions should: 

• Start contacting former students in repayment before 2026 to help them avoid defaults 
• Monitor their CDR continuously to mitigate the risk of becoming noncompliant with federal regulations and to reduce the risk of losing eligibility to receive federal student assistance funding 

Impact on other nonprofit organizations 

While higher education institutions bear the direct impact of increased default rates on federal student loans, other nonprofit organizations should also be aware of how these defaults could affect their operations. Many former students with federal student loans work at nonprofit organizations, which often receive various forms of federal assistance. These organizations must verify that federal funds are not paid to businesses or individuals, including employees, who are suspended or debarred by the federal government. This is because suspension or debarment can result from defaulting on federal student loans, as well as for other reasons.  

As more individuals are expected to default, the list of those debarred or suspended from receiving federal payments could grow. Nonprofits are required to periodically review their vendors and employees to verify they are not suspended or debarred. If identified as such, these vendors and employees would be ineligible to receive any payment for goods or services, including wages and Medicaid, through federal funding. 

It's crucial for nonprofit organizations to regularly monitor the suspension and debarment list, which frequently changes, to maintain compliance. Organizations can support their employees by communicating the importance of making student loan payments and avoiding default. Helping employees understand how their student loan payments can impact their employment may encourage timely payments and prevent defaults.  

With collection on default federal student loans back in effect, it’s imperative that higher education institutions and other affected nonprofits follow these strategies to ensure compliance. Learn more about BerryDunn’s team and services. 

Read this if your company is considering financing through a sale leaseback.

In today’s economic climate, some companies are looking for financing alternatives to traditional senior or mezzanine debt with financial institutions. As such, more companies are considering entering into sale leaseback arrangements. Depending on your company’s situation and goals, a sale leaseback may be a good option. Before you decide, here are some advantages and disadvantages that you should consider.

What is a sale leaseback?

A sale leaseback is when a company sells an asset and simultaneously enters into a lease contract with the buyer for the same asset. This transaction can be used as a method of financing, as the company is able to retrieve cash from the sale of the asset while still being able to use the asset through the lease term. Sale leaseback arrangements can be a viable alternative to traditional financing for a company that owns significant “hard assets” and has a need for liquidity with limited borrowing capacity from traditional financial institutions, or when the company is looking to supplement its financing mix.

Below are notable advantages, disadvantages, and other considerations for companies to consider when contemplating a sale leaseback transaction:

Advantages of using a sale leaseback

Sale leasebacks may be able to help your company: 

• Increase working capital to deploy at a greater rate of return, if opportunities exist
• Maintain control of the asset during the lease term
• Avoid restrictive covenants associated with traditional financing
• Capitalize on market conditions, if the fair value of an asset has increased dramatically
• Reduce financing fees
• Receive sale proceeds equal to or greater than the fair value of the asset, which generally is contingent on the company’s ability to fund future lease commitments

Disadvantages of using a sale leaseback

On the other hand, a sale leaseback may:

• Create a current tax obligation for capital gains; however, the company will be able to deduct future lease payments.
• Cause loss of right to receive any future appreciation in the fair value of the asset
• Cause a lack of control of the asset at the end of the lease term
• Require long-term financial commitments with fixed payments
• Create loss of operational flexibility (e.g., ability to move from a leased facility in the future)
• Create a lost opportunity to diversify risk by owning the asset

Other considerations in assessing if a sale leaseback is right for you

Here are some questions you should ask before deciding if a sale leaseback is the right course of action for your company: 

• What are the length and terms of the lease?
• Are the owners considering a sale of the company in the near future?
• Is the asset core to the company’s operations?
• Is entering into the transaction fulfilling your fiduciary duty to shareholders and investors?
• What is the volatility in the fair value of the asset?
• Does the transaction create any other tax opportunities, obligations, or exposures?

Accounting for sale leaseback transactions under Accounting Standards Codification (ASC) Topic 842, Leases, can be very complex with varying outcomes depending on the structure of the transaction. It is important to determine if a sale has occurred, based on guidance provided by ASC Topic 842, as it will determine the initial and subsequent accounting treatment.

The structure of a sale leaseback transactions can also significantly impact a company’s tax position and tax attributes. If you’re contemplating a sale leaseback transaction, reach out to our team of experts to discuss whether this is the right path for you.

To reduce federal debt and expenditures, the Trump administration mandated an unprecedented, large-scale layoff across federal agencies in February 2025. As a result, approximately 1,300 probationary employees at the Centers for Disease Control and Prevention (CDC), nearly 10% of its workforce, received dismissal notices.

The decision to cut probationary employees and the subsequent programming and staffing cuts in March 2025 worsened an already existing public health workforce shortage. Based on the 2021 Public Health Workforce Interests and Needs Survey (PH WINS), 27% of public health professionals planned to leave their organization, excluding those planning to retire, within the next five years. Research indicated that 24% of those public health professionals were planning to leave for non-governmental jobs, which impacts future governmental public health leadership and strains the overall workforce within public health agencies at all levels.

The CDC’s workforce boasts some of the top experts for disease control and health information, with over a third of the 13,000 employees holding a master’s or doctorate degree responsible for protecting Americans from outbreaks and other public health threats. In 2023, with public health agencies still recovering from the COVID-19 response, the CDC’s budget was slashed by $1.8 billion—a 22% reduction, with nearly 80% of the CDC’s base budget shared with state and local health departments.

In addition, the CDC recently pulled back $11.4 billion from state and local health departments, nongovernment organizations, and international recipients. While these funds were allocated in response to the COVID-19 pandemic, public health agencies depended on them for critical initiatives such as modernizing data systems, improving immunization access, and bolstering laboratory capacity to prepare for the next public health emergency.

Burnout in state public health agencies

Many of those working within public health agencies at the local and state levels are questioning how the restructuring and funding cuts at the federal level may impact their roles. Staff may be feeling discouraged as their coworkers are laid off and programs are shut down, halting the past few years of progress and investments. It is likely that with fewer resources, feelings of job insecurity, excessive workloads, and even moral injury, the remaining staff will face greater levels of burnout. Burnout was the number one reason for leaving the field cited by public health professionals in 2021.

With staff burnout, position turnover, and elimination of funding and resources, the existing workforce is scrambling to plug the gaps. State public health agencies rely on partnerships with federal agencies, such as the CDC, for guidance and expertise to address state and local public health challenges. The sudden dismissal of CDC employees coupled with program closures has dismantled training programs that were integral to bolstering the workforce of state and local public health departments. For example, the Public Health Associate Program trained, deployed, and supported recent college graduates and other early career workers for two years. As a result, public health agencies will be forced to shift responsibilities, priorities, and resources.

Future public health professionals, including those in college and postgraduate public health studies, are now facing doubts and questions regarding the stability of their chosen career path. In a recent survey by the Federal News Network, nearly 82% of federal employee respondents agreed that the mass federal terminations will make it harder to recruit young and mid-career employees and will overall result in an increased workload for an already understaffed workforce. Both experienced professionals and those considering public health careers are navigating an uncertain future within the public sector.

Migration of public health staff to the private sector 

The private sector (i.e., hospitals, not-for-profits, for-profits, and other areas outside government) offers a growing number of public health job opportunities, and federal workers are expected to naturally migrate to those jobs with roles ranging from consultants and epidemiologists to environmental specialists.

A Colombia University Mailman School of Public Health study found that most public health occupations in governmental agencies pay workers substantially less compared to workers in the same occupations in the private sector. In addition to better compensation, public health jobs in the private sector can potentially offer more dynamic work environments and faster career advancement.

Furthermore, while millions of federal workers were ordered to return to offices post-COVID, work-from-home (WFH) policies and trends remain steady in the private sector. WFH policies and expectations will impact federal agencies’ ability to recruit new talent and maintain a steady hiring pipeline. In five years, 30% of the workforce will be represented by Gen Z. A recent survey from Slack indicated 12% of workers want to return to the office full time, 51% of Millennials and Gen Z workers want hybrid roles that allow for most of their time spent working from home, and 30% of Gen Z want to stay remote full time.

Strategies for attracting top talent to the public health workforce

Public health agencies have a powerful opportunity to inspire the next generation of professionals to join the governmental workforce. To build a pipeline of committed talent, agencies must take proactive steps—establishing dynamic mentorship programs, creating hands-on internship opportunities, and sharing compelling success stories that highlight the profound impact and fulfillment of serving in public health.

Additionally, fostering a supportive workplace culture is essential. Agencies can prioritize employee well-being through innovative peer support initiatives designed to combat burnout, ensuring that professionals not only enter the field but thrive within it. By championing these strategic actions, public health agencies can cultivate a resilient, motivated workforce dedicated to protecting and improving community health.

Public health professionals are uniquely equipped to navigate complex environments. This resilient workforce has withstood a global pandemic, chronic staff turnover and shortages, and unstable federal funding throughout the past decade. Despite these challenges, public health workers remain motivated to prevent disease and injury, promote health and well-being, and protect their communities from health risks and threats.

The foundations of public health training—critical analysis, effective communication, and strategic problem-solving—provide public health workers the skills needed to navigate uncertainty, respond quickly, and survive difficult times. After all, public health has always moved forward despite the challenges and limited resources encountered along the way.

BerryDunn's public health consulting team is comprised of former state and local health agency leaders and public health professionals with administration, informatics, policy and program development, and project management expertise. Contact our team to learn more about how we can help you design public health strategies that take into account diversity, equity, and inclusion and help promote health, prevent disease, and improve the quality of life for your citizens.

The Supporting Affordability and Fairness with Every Bet (SAFE) Act is a proposed federal legislation designed to establish minimum standards for sports betting across the United States. It aims to ensure responsible gambling practices, protect consumers, and uphold the integrity of sports betting nationwide.

This article summarizes key compliance requirements outlined in the SAFE Bet Act and examines how the American Institution of Certified Public Accountants (AICPA) System and Organization Controls (SOC) 1 and SOC 2 standards help operators report internal controls over financial reporting (SOC 1) and security, availability, confidentiality, processing integrity, and privacy (SOC 2).

Key compliance requirements of the SAFE Bet Act

State sports wagering programs: States must implement federally compliant sports wagering programs, including measures to prevent underage gambling, promote responsible gambling, and support problem gamblers.

Artificial intelligence (AI) regulations: The act prohibits AI-driven tracking of gambling behaviors for personalized promotions and the use of AI to develop gambling products such as microbets.

National self-exclusion list: A national self-exclusion list allows individuals to voluntarily exclude themselves from sports betting, providing an essential tool for managing gambling-related risks.

Affordability checks: Bettors must undergo affordability checks to ensure wagers do not exceed 30% of their income, preventing excessive gambling and protecting vulnerable individuals.

Advertising restrictions: Strict regulations limit sports betting advertisements during primetime hours and live sporting events. Additionally, promotional terms like “bonus” and “no-sweat” are restricted to prevent misleading marketing.

Internal control development and reporting for sports wagering operators

Beyond compliance requirements, the SAFE Bet Act mandates that sports wagering operators document and maintain robust internal controls to ensure adherence to all applicable laws, regulations, and policies.

Section 103, paragraph 16, requires operators to submit an annual written system of internal controls to the state and undergo an independent third-party or regulatory audit at least once every three years.

With over 20 years of experience assisting gambling operators with independent third-party attestation reports, we have observed that most states now require annual independent audits. These audits typically assess controls related to financial reporting (SOC 1) and security, availability, confidentiality, processing integrity, and privacy (SOC 2).

SOC audits and SAFE Bet Act compliance

SOC audits reinforce sportsbook operators’ commitment to financial reporting, data security, privacy, and operational integrity, aligning with the SAFE Bet Act in several ways:

Security and privacy: Both SOC audits and the SAFE Bet Act prioritize consumer data protection. SOC 2 audits evaluate security and privacy controls, ensuring responsible data handling. The SAFE Bet Act mandates anonymized reporting and restricts AI-driven tracking, supporting privacy safeguards.

Compliance and transparency: SOC audits offer a structured method to evaluate and report compliance with security standards. Likewise, the SAFE Bet Act requires annual sports wagering reports, fostering transparency and accountability.

Consumer protection: Both frameworks emphasize consumer protection. SOC 2 audits assess controls for safeguarding data, while the SAFE Bet Act introduces affordability checks and advertising restrictions to prevent exploitation and promote responsible gambling.

BerryDunn can help you stay compliant with the SAFE Bet Act

The SAFE Bet Act establishes rigorous compliance standards for United States sports betting, focusing on responsible gambling, consumer protection, and integrity. SOC audits provide sportsbooks with a proactive approach to compliance, trust-building, and enhanced security measures.

BerryDunn has more than 25 years of specialized experience in providing auditing and consulting services to gaming, sportsbooks, and lottery clients. We provide the insight necessary to help you ensure the security and integrity of a successful gambling operation. Our professionals bring over two decades of expertise in assisting gambling clients with audit requirements, including SOC, NIST, PCI, and ISO 270001. Learn more about our team and services.