The Treasury Department’s new filing-season analysis shows temporary tax breaks enacted in last year’s One Big Beautiful Bill Act (OBBBA) delivered the largest share of tax relief to low- and middle-income Americans. But those statistics tell only part of the story. 

Treasury reports selected tax breaks claimed by taxpayers who had filed by mid-May for tax year 2025. These are the only data available now—2026 returns won’t be filed until next year—but they can’t show who benefits most from the law overall.  

The reason is timing. While several OBBBA provisions affect 2025 returns—such as temporary tax breaks for tips, overtime, car loan interest, and seniors—its most expensive, least progressive changes don’t begin until 2026, when lower marginal tax rates enacted by the 2017 Tax Cuts and Jobs Act (TCJA) were set to expire.  

A 2025 snapshot therefore captures the law’s smaller, lower- and middle-income tilted temporary provisions while leaving out its core changes. 

Even for 2025, TPC’s estimates tell a different story 

TPC finds the biggest 2025 cuts as a percentage of after-tax income went to middle and high earners, households making $66,000 to $1,126,000 a year. Using a different distributional measure, the top 20 percent received more than half of all the cuts: The poorest fifth of households got an average cut of about $40, while the top fifth got more than $2,900. (TPC's estimates include everything in effect in 2025, such as the higher $40,000 SALT cap and business breaks for research and investment.)

Treasury’s new numbers do show more taxpayers claimed the overtime tax deduction than in TPC’s estimates, but the relatively low average claimed ($3,100) suggests that might be, in part, a result of taxpayer confusion before employer reporting requirements take effect this year. 

But 2025 is not the best measure of the OBBBA’s long-term distributional effects  

Many of the headline provisions that Treasury emphasizes—including tax cuts for tips, overtime, car loan interest, and seniors—expire after 2028. By contrast, many of the law’s larger structural tax changes, including permanent extensions of major TCJA provisions, continue beyond that window. 

Taking those TCJA extensions into account, TPC’s analysis shows that in 2026 higher-income households will get the most tax relief (Figure 1). As a share of after-tax income, TPC finds the average tax cut is generally larger for higher-income households than for lower-income households. (Households in the top quintile have incomes over $200,000.)

FIGURE 1

Using another metric, the top 20 percent of households receive almost 60 percent of the tax cuts, and the top 5 percent (with incomes over $460,000) receive over 35 percent. The bottom quintile gets an average $150 tax cut, while the top quintile gets an average tax cut of over $12,000.  

The law also includes major cuts to programs such as Medicaid and food stamps that go mostly to low-income families, most of which also haven’t gone into effect yet. So, beyond 2026, the law (including the impact of spending cuts) is even more tilted toward higher income households.  

Treasury and TPC do not measure “tax relief” in the same way 

Treasury counts “tax relief” differently than TPC, emphasizing the number of taxpayers claiming selected provisions. Because of how the 2025 law was written, many of those provisions do reach large numbers of households earning less than $200,000.  

But counting recipients is not the same as tracking where the dollars go. 

Most taxpayers earn less than $200,000, so almost any tax break will reach more low- and middle-income taxpayers than higher-income households. Importantly, a tax break can go to millions of modest earners and still send most of its dollars to the top.  

Both measures can be useful, but they answer different questions 

Treasury’s filing-season data show who claimed selected tax breaks in 2025. That’s important to understand for tax administration purposes. TPC’s distributional analysis of the full law shows who benefits most from the tax provisions overall. On that broader question, OBBBA is not primarily a low-income tax relief bill.