TCJA stands for the Tax Cuts and Jobs Act, the working name for the tax law enacted in December 2017 that rewrote large parts of the individual, business and international rules in the Internal Revenue Code. The name is a convention rather than a citation, and knowing why matters when you go looking for the text.
The enacted law carries a different title on its face. It is headed “An Act To provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”, dated December 22, 2017, and it came from H.R. 1 (Public Law 115-97, as printed by the Government Publishing Office).
The Section Headed Short Title Does Not Give One
This is the fact that explains the naming confusion, and it is visible in the first section of the Act.
Section 11000 is headed “SHORT TITLE, ETC.”, and its only subsection is subsection (a), Amendment of 1986 Code, which reads: except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. The next line of the printed law is the heading for Subtitle A, Individual Tax Reform (Public Law 115-97).
So the section reserved for a short title contains a drafting convention and nothing else. “Tax Cuts and Jobs Act” is what the bill was called on its way through Congress and what practitioners still call it, and it is the right name to use in conversation. It is the wrong thing to cite. Cite the public law, or cite the Code section the Act amended, which is what section 11000(a) tells you to do.
Two Clocks Run Through the Act
The single most useful thing to know about the TCJA is that its provisions do not all expire, and the ones that do say so in the text of the Code section rather than in a general sunset clause at the end of the Act.
The individual rate change is dated on its face. Section 11001 amended section 1 by adding a new subsection (j), headed “Modifications for Taxable Years 2018 Through 2025”, which opens: in the case of a taxable year beginning after December 31, 2017, and before January 1, 2026, subsection (i) shall not apply, and this section, other than subsection (i), shall be applied as provided in paragraphs (2) through (6) (Public Law 115-97, section 11001).
The corporate rate change is not. Section 13001, headed “21-PERCENT CORPORATE TAX RATE”, amended subsection (b) of section 11 to read: the amount of the tax imposed by subsection (a) shall be 21 percent of taxable income (Public Law 115-97, section 13001). No date qualifier appears in the replacement text at all.
That structural difference is why a summary saying “the TCJA expires” is wrong as written, and why a summary saying “the TCJA is permanent” is equally wrong. Each provision has to be read on its own.
The Same Dated Formula Appears Again and Again
Once you know the phrase, you can find every temporary provision by searching for it.
The standard deduction increase was written as a new paragraph (7) of section 63(c), headed “Special rules for taxable years 2018 through 2025”, opening with the same words: in the case of a taxable year beginning after December 31, 2017, and before January 1, 2026 (Public Law 115-97, section 11021). What that paragraph does is substitute figures into the existing paragraph rather than replace it, so the pre-existing amounts are still sitting underneath. The current amounts, and the statuses they attach to, are set out in standard deduction.
The personal exemption was suspended by the same device, and the drafting is worth seeing because it is a substitution rather than a repeal. Section 11041 amended section 151(d) by striking “In the case of” in paragraph (4) and inserting “Except as provided in paragraph (5), in the case of”, and by adding a new paragraph (5), “Special rules for taxable years 2018 through 2025”, under which, in the case of a taxable year beginning after December 31, 2017, and before January 1, 2026, the term exemption amount means zero (Public Law 115-97, section 11041).
Read that carefully. The exemption was not deleted. Its amount was set to zero for a window, and the surrounding machinery, including every other provision that tests whether a deduction under section 151 is allowable, keeps operating. That is why an exemption amount of zero still does real work elsewhere in the Code.
What the Act Created Rather Than Modified
Not everything in the TCJA was a change to an existing rule. Section 11011 added an entirely new section to part VI of subchapter B of chapter 1: section 199A, Qualified Business Income, under which in the case of a taxpayer other than a corporation there shall be allowed as a deduction for any taxable year an amount equal to a sum the section then defines (Public Law 115-97, section 11011). The deduction itself, its thresholds and its limitations are worked through in QBI deduction.
Other provisions of the Act are covered where they operate rather than repeated here. Section 11042 is headed “LIMITATION ON DEDUCTION FOR STATE AND LOCAL, ETC. TAXES” and amends subsection (b) of section 164, section 11051 is headed “REPEAL OF DEDUCTION FOR ALIMONY PAYMENTS” and strikes section 215, and section 13201 is headed “TEMPORARY 100-PERCENT EXPENSING FOR CERTAIN BUSINESS ASSETS” (Public Law 115-97). Each is worked through where it operates, in SALT deduction, alimony and bonus depreciation.
How to Cite It Without Getting It Wrong
Three habits keep a file clean.
Cite the public law and section when you mean what Congress enacted, because that text does not move. Cite the Code section when you mean the rule in force, because that text does move and the Act is only one of the things that has moved it.
Never state that a TCJA provision applies to a current year without reading the Code section as it stands today. A provision written to expire may have been extended, amended or replaced since, and a summary written in an earlier year will not tell you that.
And when a client says “under the TCJA”, find out which provision they mean. The Act ran to two subtitles of individual reform alone, and almost nothing useful can be said about it as a whole.
Common Questions
Tax Cuts and Jobs Act. The enacted law does not use that name: its title reads “An Act To provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”, and the section headed “SHORT TITLE, ETC.” supplies a drafting convention rather than a short title (Public Law 115-97).
Parts of it were written to, and parts were not. The individual rate tables were added as section 1(j), “Modifications for Taxable Years 2018 Through 2025”, applying to a taxable year beginning after December 31, 2017, and before January 1, 2026, while the replacement corporate rate at section 11(b) was enacted with no date qualifier in its text (Public Law 115-97). Whether a dated provision is still in force for a given year is a question about the Code today, not about this Act.
No, and section 11000(a) is the reason the two get confused. That subsection instructs that an amendment expressed in the Act is to be read as an amendment to the Internal Revenue Code of 1986 (Public Law 115-97). The Act changes the 1986 Code. It does not replace it, and the Code kept its name.
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