10 Ways Millennials and Gen Z Could Benefit from the Big Beautiful Bill Act

1. Targeted Tax Relief for Earned Income 

The OBBA eliminates federal income taxes on tip income and overtime income, with maximum annual deductions of $25,000 for tips and $12,500 for overtime compensation ($25,000 for joint filers). For young professionals working in service industries or putting in extra hours to advance their careers, this translates to immediate take-home pay increases. 

2. Vehicle Loan Interest Deduction 

The act provides an itemized deduction of up to $10,000 annually for interest paid on loans for U.S.-assembled vehicles. This deduction phases out beginning at a modified adjusted gross income (MAGI) of $100,000 for single filers and $200,000 for joint filers. Just bear in mind that it’s only in force through 2028. 

3. Federal Student Loan Repayment Simplification 

OBBBA fundamentally restructures federal student loans. Starting July 1, 2026, borrowers will choose between just two options: a standard repayment plan or the income-driven RAP plan, which allows payments between 1% and 10% of borrower income for up to 30 years. This simplified system streamlines repayment options while maintaining income sensitivity. 

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4. Expanded Employer Student Loan Contributions 

The law also expands employer student loan payment benefits, excluding up to $5,250 (per employee) in employer loan payments from taxable income, encouraging more companies to offer this valuable benefit to attract young talent.

5. Broader Use of 529 Plans

529 Education Savings Accounts have been expanded beyond traditional college expenses, K-12 tuition, and some apprenticeship programs. Now these accounts can also be used to fund K-12 educational materials, testing fees, tutoring, and trade certifications.

6. Roth IRA Rollovers from 529 Accounts

Up to $35,000 in unused 529 funds can now be rolled over into Roth IRAs, eliminating the penalty for families who saved more than needed for education. This creates a powerful wealth-building strategy where education savings can seamlessly transition to retirement savings.

7. Tax-Deferred Accounts for Newborns

Children born between 2025 and 2028 are eligible for a government-seeded investment account, designed to promote early-stage wealth building. The account includes a $1,000 initial deposit and allows for annual parental contributions of up to $5,000. Earnings grow tax-deferred, but qualified withdrawals are taxed as long-term capital gains. Some media outlets have dubbed these “Trump Accounts,” though the official legislative language may differ. 

8. SALT Deduction Cap Temporarily Increased 

The law temporarily raises the State and Local Tax (SALT) deduction cap from $10,000 to $40,000 for households earning under $500,000, with annual 1% increases through 2029. For young professionals in high-cost, high-tax areas, this change could help to make homeownership more attainable.

9. Expanded HSA Eligibility 

Starting January 1, 2026, Americans enrolled in Bronze or Catastrophic Affordable Care Act plans may contribute to Health Savings Accounts, expanding access to these accounts to around 7.3 million more people and opening the door for them to take advantage of the triple tax advantages that HSAs offer.

10. Job Creation and Economic Growth Outlook 

The OBBBA includes provisions that support domestic manufacturing as well as simplified regulation for small businesses and expanded energy production, which could lead to more jobs. While economic impact forecasts vary, the Joint Committee on Taxation projects that households earning under $50,000 are likely to see the most immediate net benefits. These households include a large portion of Millennial and Gen Z workers.

Practical Steps to Maximize Benefits

• For Current Students and Recent Graduates: review your student loan repayment options and consider the new RAP plan when available; explore expanded 529 Education Savings Account uses for professional development and certifications; and take advantage of employer student loan payment benefits.
• For Young Professionals: track tips and overtime income to maximize new tax deductions; consider the vehicle loan interest deduction when purchasing American-made cars; and evaluate HSA opportunities if using high-deductible health plans.
• For New Parents: open "Trump Accounts" for children born after 2025, and plan 529 contributions with expanded usage flexibility in mind.

Looking Forward

The Big Beautiful Bill Act represents a significant shift toward policies that aim to simplify financial systems, reward work, and support wealth accumulation. For Millennials and Gen Z, these changes come at a crucial time when they're making foundational financial decisions that will impact their long-term wealth building.

The combination of immediate tax relief, student loan reform, enhanced savings opportunities, and support for homeownership creates multiple pathways for younger Americans to build financial security. By understanding and strategically utilizing these benefits, Millennials and Gen Z can position themselves for greater financial success in the years ahead.

Get in touch with our team for a complimentary consultation  to learn how we can help you to leverage these new opportunities and maximize your wealth-building potential as part of a comprehensive and strategic financial plan.

Authored by WHZ Managing Partner, Advisory Leisl L. Langevin CFP® CDFA®. AI may have been used in the research and initial drafting of this piece. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. 697 Pomfret Street, Pomfret Center, CT 06259 and 392-A Merrow Road, Tolland, CT 06084, 860.928.2341. http://www.whzwealth.com. These materials are general in nature and do not address your specific situation. Diversification does not assure a profit or protect loss in declining markets and cannot guarantee that any goal or objective will be achieved. For your specific investment needs, please discuss your individual circumstances with your financial advisor. WHZ Strategic Wealth Advisors does not provide tax or legal advice, and nothing in the accompanying pages should be construed as specific tax or legal advice.