By Michael T. Jackson
On 3 July, the U.S. House of Representatives voted in favor of the Senate-amended version of the FY 2025 Budget Reconciliation Package, or the One Big Beautiful Bill Act (H.R. 1) by a vote of 218-214. The vote was largely along party lines, with two Republicans joining all Democratic members in voting against the bill. The bill was then signed into law by President Trump on 4 July, meeting the president’s stated goal of enacting the bill into law by the U.S. Independence Day holiday.
The enactment of the One Big Beautiful Bill Act (OBBB Act) culminates six months of efforts by Congress to extend and make permanent the lower individual and certain corporate tax provisions from the Tax Cuts and Jobs Act of 2017 (TCJA) and provide funding for various immigration and defense-related priorities. It represents the biggest shift in the U.S. tax code since 2017 and brings with it a range of new and updated provisions that impact talent mobility.
The OBBB Act enacted by Congress did not address all of the provisions called for by WERC and the broader talent mobility industry, most notably around ending the suspension of the moving expense tax deduction and exclusion for all movers. However, the act, as approved by Congress, expanded the scope of U.S. government moves eligible for the moving expense tax deduction and exclusion and improved the language around the suspension from what was included in earlier versions, both of which came about due to the industry’s engagement around the deduction and exclusion. Additionally, the final bill from the Senate that also passed the House reflected a number of changes beneficial to the talent mobility industry.
Moving Expense Deduction and Exclusion: General Suspension Remains, but More U.S. Government Movers Have Benefit Reinstated
The OBBB Act does not reinstate the moving expense tax deduction and exclusion in its entirety, for which WERC, along with the American Trucking Associations’ Moving & Storage Conference and International Association of Movers, have been advocating. However, the OBBB Act incorporates changes from the Senate that resulted in our industry getting improved legislative language around the continued suspension and includes a significant achievement for our industry: reinstatement of the deduction and exclusion for an additional class of U.S. government employees. The bill would allow the deduction and exclusion “pursuant to changes in assignment that require relocation” across federal agencies and branches within the U.S. intelligence community. This would be in addition to active-duty military personnel, who are currently able to claim the tax relief when being relocated and would continue to do so under the OBBB Act.
For reference, the U.S. intelligence community is largely defined in U.S. code as those working for the Office of the Director of National Intelligence, the CIA, National Security Agency, the Defense Intelligence Agency, the National Geospatial-Intelligence Agency, the National Reconnaissance Office, and certain offices within the Departments of State, Treasury, and Homeland Security.
This expansion of eligibility has been one that WERC, ATA-MSC, and IAM have been urging Congress to implement since 2018 as a means to support U.S. national security interests by reducing the financial burden on personnel within the intelligence community as they move their critical talent.
Full reinstatement of the moving expense tax deduction and exclusion faced an uphill battle from the beginning as Congress focused its priority on making permanent the tax rates from the TCJA as well as enacting several provisions advocated for by President Trump. With the Senate adopting a new current policy baseline approach this year to score the financial costs of provisions from the TCJA, the moving expense tax deduction and exclusion became a cost to reinstate rather than a savings to extend the suspension, which made making wholesale changes to the provision more challenging.
Inclusion of the intelligence community-related language by the Senate and its presence in the final bill in spite of these overall conditions reflects a move in the right direction for our efforts to expand application of the moving expense deduction and exclusion. This would not have been possible without the cumulative efforts across the industry, including the active outreach directly to Congress done by WERC members and other mobility practitioners in recent weeks.
The final OBBB Act also positions us to continue to urge Congress to implement further expansions to ultimately cover all U.S. government and civilian private sector employees. House Speaker Mike Johnson and other Republican leaders have indicated that the current 119th Congress is likely to take up two more reconciliation bills before the Congressional term ends in January 2027 that will seek to address additional tax and spending matters not part of the OBBB Act, and WERC and its industry partners will continue to advocate for enabling more workers to once again take advantage of the moving expense tax deduction and exclusion to support employment-related mobility by ending the indefinite suspension.
OBBB Act Brings Major Impacts for Talent Mobility
Within the OBBB Act, a range of changes are being implemented that will impact talent mobility. Some provisions, such as new immigration fees and a new remittance excise tax, will result in additional financial costs for companies and their transferees, depending on particular circumstances and program profiles. However, other provisions, including changes to the SALT caps and the benefits around making permanent the cuts introduced in the TCJA, are positioned to benefit many of the American workers who undertake an employment-related assignment or transfer.
As the act’s parameters were considered by the House and Senate, numerous provisions were modified during the process, and the changes approved by the Senate and adopted by the House made several significant improvements for our industry. These include:
- State and Local Tax (SALT) Caps: Future SALT cap levels have been one of the most contentious elements of the debate between the House and Senate over H.R. 1, and the final provision adopted by the Senate increases the cap to the House-passed levels of $40,000+ for tax years 2025 through 2029. This represents a significant shift from the Senate’s initial language, which maintained the cap at the current $10,000 rate, and the turnaround will shift the tax liabilities for many transferees and assignees starting with the current tax year.
- Remittance Excise Tax: The Senate-passed version of H.R. 1 enacted several significant changes that reduced or eliminated areas of concern for talent mobility around the new excise tax on individuals completing electronic funds transfers to recipients outside of the United States. These include lowering the tax amount from 3.5% to 1% and exempting transfers withdrawn from U.S. bank accounts or funded via a U.S. credit or debit card.
- Immigration Fees: The Senate-passed version maintained a range of new employment-based immigration-related fees, particularly related to applications and work authorization initial and renewal processes for asylum, temporary protected status, and parole cases. Additionally, a new $250 visa integrity fee, reimbursable to the individual post-visa expiration if criteria are met, will apply to all nonimmigrant visas issued. However, the Senate lowered several fee amounts, particularly around asylum-related cases, and did not significantly expand the scope of fees to include a broader range of employment-based processes and applications beyond what was covered in the House.
The OBBB Act also expands the scope of educational programs for which funds within a 529 qualified tuition program to include post-secondary credentials from industry-recognized entities, such as WERC’s CRP and GMS certifications, to support workforce development. WERC joined hundreds of other industry associations and not-for-profit organizations in urging Congress to implement this expansion, and this provision will help talent mobility practitioners advance their own professional development.
Questions Remain About Implementation Impacts on Talent Mobility
With the OBBB Act now U.S. law, talent mobility practitioners will need to monitor how various provisions of the act are implemented by both federal agencies and by private sector organizations. Some provisions to keep an eye on include:
Visa Integrity Fees for Nonimmigrant Visa Applicants
One of the broadest-reaching new fees in the act is a new visa integrity fee, set at the higher of $250, or an amount established by rule, per visa for fiscal year 2025 but reviewed annually and adjusted based on inflation, to be collected with the issuance of each nonimmigrant visa. This new fee would be reimbursed to the foreign national after the expiration of the visa validity if the individual can prove adherence with set requirements, including: compliance with requirement of their nonimmigrant visa category, departure from the United Sates within five days of the visa expiration, and no extension of status or adjustment of status during the visa’s validity period.
With this new provision, key operational components around how the fee will be collected, reimbursement requests adjudicated, and payment of approved reimbursements processed are still to be finalized and rolled out. The timing of how and when this will occur and when this new fee will be required is not clear, and talent mobility professionals and their immigration partners will need to watch for anticipated forthcoming U.S. government guidance to clarify these areas.
Additionally, policy guidance by applicable agencies around how to flesh out the criteria set out in the act for reviewing and approving or denying reimbursement requests will be needed, but clarity around the likelihood of foreign nationals receiving reimbursements will not occur until seeing how the U.S. government puts these policies into practice.
Remittance Excise Tax
Despite the changes implemented by the Senate to exclude payments from U.S. bank accounts and via U.S. credit and debit cards from being subject to the 1% tax, the additional reporting and compliance provisions resulting from these provisions will change how any cross-border remittances by individuals or organizations are processed and will likely result in remittance transfer providers considering additional operational fees for all foreign national-related transactions.
Additionally, talent mobility practitioners will need to work with their applicable internal or external tax partners to monitor how the Internal Revenue Service and the Treasury Department apply the provisions in practice in the coming months and beyond and how this new tax interplays with various country-specific tax treaties to impact the individual circumstances of transferees and assignees.
WERC and its member-led public policy forums will continue to monitor the implementation of the One Big Beautiful Bill Act and will provide updates to members as more is known.