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Updated: December 10, 2025 How to

How to make the most of federal tax law changes in 2026

By Ben Dailey, guest contributor

The tax changes included in President Donald Trump’s One Big Beautiful Bill Act introduce several business-friendly provisions taking effect in 2026. These federal changes are generally positive for Maine businesses, especially those that invest heavily in equipment or operate as pass-through entities. 

Ben Dailey of the Swanson Group
Photo / Courtesy of the Swanson Group
Ben Dailey

However, Maine did not change one key workaround like 30 other states in America, putting Maine businesses at a slight disadvantage than what businesses in other states will experience. Read on for more details on how these changes will benefit your business in 2026. 

Bigger estate and gift tax exemption

Starting in 2026, the estate and gift tax exclusion will jump to $15 million, with future increases tied to inflation.

For family business owners, that’s a significant win: it means you can transfer more of your company or other assets to the next generation without triggering federal estate or gift taxes.

That said, the estate tax is always a political hot topic. While we have clarity for now, a future Congress could revisit the rules. It’s a good idea to work with an estate planning attorney to make the most of the expanded exemption while it’s available.

A deduction becomes permanent

Another boost for family businesses: the Qualified Business Income deduction — originally temporary — has now been made permanent.

This allows owners of S corporations, partnerships, and sole proprietorships to deduct up to 20% of their qualified business income. For the many family-owned pass-through entities out there, this offers long-term, reliable tax relief.

Permanent bonus deprecation and higher expense limits

The ability to immediately write off the full cost of qualifying equipment or property — known as bonus depreciation — is here to stay. Section 179 expensing limits have also been raised and will now adjust with inflation.

These changes free up cash flow and make it easier for businesses to invest in growth-critical assets.

More flexible exemption for Qualified Small Business Stock 

There’s also good news for entrepreneurs and family-owned C corporations. The rules around Qualified Small Business Stock have been expanded, allowing up to 100% of the gain from a qualifying stock sale to be excluded from taxes.

The updated law introduces a tiered exclusion for stock held less than five years and removes the old Alternative Minimum Tax complications.

For anyone building a business with an eventual sale in mind, this could be a major planning opportunity—though getting the structure right is essential to preserve Qualified Small Business Stock status.

SALT Deduction cap is temporary — and that's a problem for Maine businesses 

The state and local tax deduction cap has been temporarily increased from $10,000 to $40,000, but only through 2028.

That creates challenges for many Maine small businesses, especially pass-through entities where owners pay business taxes on their individual returns. Without a permanent fix, the cap limits — or even eliminates — the deduction for business-related income taxes.

More than 30 states have already adopted a pass-through entity tax workaround that allows businesses to deduct these taxes at the entity level. Maine has not. As a result, Maine small businesses are at a competitive disadvantage compared to their peers in states that have already made this fix. 

The bottom line 

Overall, Maine businesses are expected to fare better thanks to 2026 federal law changes, that are mostly favorable to small and large businesses alike.
 

About the author

Ben Dailey is a senior tax manager with the Swanson Group in Westbrook.

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