With provisions relating to student loans, tax policy and state Medicaid programs, The One Big Beautiful Bill Act H.R.1 that was signed into force by President Trump on the 4th of July, contains a number of measures that will have a direct impact on dental professionals and practices countrywide.
As stated by the American Dental Association in a document outlining the budget reconciliation bill’s impact on the dental profession, and verified by dental practice accountants, some particularly impactful measures will include deductions that are multiple extended, reauthorized or new, along with incentives for investment and education, and new or improved research.
A closer look at some of the tax provisions
Impacting dental practices, students and the dental profession as a whole, one of the tax provisions included in the bill is the tax deduction for pass-through entities, which, due to advocacy from the ADA they say, was fully restored. Protecting dentists from a tax hike of 1.5% to 5%, and guaranteeing tax parity for small dental practices, this is a welcome measure.
Other tax provisions that will be especially impactful for the dental profession, include a cap on state and local tax deductions of $40,000, bonus depreciation of 100%, a deduction of 20% on small business income, new deductions for domestic research, a corporate tax rate of 21%, and postsecondary credentialing expenses, among others.
Bill changes for dental students, schools and dental workers
Changes in the bill have also been made to the student aid model at federal level, with an impact on students of the dental professional, schools and those working within the profession, that could be far-reaching.
If you’re currently a dental student, or are considering becoming one in the future, the ADA recommend that you make yourself familiar with the changes so that you don’t face uncertainty while the transition takes place. Some of the biggest changes include such things as limits placed on aid amounts at a federal level, new options for repaying loans, an elimination and reduction of student aid programs that were previously in place, and new mechanisms for accountability for aid programs.
Now eliminated under new legislation is The Graduate PLUS Loan Program, and changes as well as reductions, have been made to loan limits for professional dental schools, parent PLUS loan limits and repayment plan options for loans.
Bill changes to Medicaid that will impact patients and dental providers
Taking effect only after the latter portion of 2026-28 are most Medicaid provisions, which may impact diagnosis and treatment as well as adult dental benefits as states get accustomed to the funding changes. Remaining mandated at a federal level under early screening, diagnosis and treatment, however, are pediatric dental benefits.
Key provisions affecting dental practices
The ADA state that provider tax limits – with phasing down beginning in October of 2026 – and capped state-directed payments – effective on or after July 4th – are two of the key provisions set to impact dental practices.
While key provisions that will impact patients include the requirements surrounding work/community engagements, and eligibility of redeterminations, both of which commence in January of 2027, along with new co-pays that begin in October of 2028.
Although most of the major bill provisions aren’t in effect yet – leaving time for revisions or adjustments to be made at both a federal and state level – scheduling a consultation with accountants for dental practices may be helpful even at this early stage, for those dental practice owners concerned about changes made to the OBBB.
