The OBBBA law: the changes that most affect Latino families

The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, made the 2017 tax rates permanent and created new benefits. Several of those changes directly affect Latino families, and some depend on something many do not have: a Social Security number.

Child tax credit now requires a Social Security number

The credit rises to $2,200 per child under 17 and is indexed for inflation from 2026. To claim it, the child must have a Social Security number and so must at least one parent; on a joint return, one spouse is enough. A family where both parents file with ITINs loses the credit even if the children are citizens. In those cases it is worth checking whether the credit for other dependents applies.

Tips and overtime

From 2025 through 2028, workers in occupations that customarily receive tips can deduct up to $25,000 a year in tips. Workers paid overtime under federal labor law can deduct the premium portion, up to $12,500, or $25,000 on a joint return. Both deductions phase out at higher incomes and require a Social Security number valid for work.

Age 65 and older

From 2025 through 2028 there is an additional $6,000 deduction per person age 65 or older, added to the standard deduction and reduced at higher incomes.

Tax on remittances

Starting January 1, 2026, money transfers abroad paid in cash, by money order or by cashier's check will carry a 1% tax collected by the transfer company. It does not apply when the transfer is paid from a bank account or with a debit or credit card issued in the United States.

State and local taxes, and car loans

The cap on the state and local tax deduction rises from $10,000 to $40,000 for incomes up to $500,000, through 2029. In addition, up to $10,000 a year of interest on a loan for a new, U.S.-assembled vehicle for personal use is deductible from 2025 through 2028.

What to do

These changes apply starting with the 2025 return. If your family files with ITINs, receives tips or overtime, or sends money home, review your situation before filing.