The One Big Beautiful Bill Act, read from Chile: eight points that matter

1. Lower rates and a larger standard deduction, for good

The 2017 rate cuts were due to expire at the end of 2025. They are now permanent, with the top rate at 37%. The standard deduction for 2026 is $16,100 for single filers and $32,200 for married couples filing jointly. For most people in Chile, U.S. tax is already offset by Chilean tax, but certainty helps when planning a move back, a sale or a retirement date.

2. Children: a bigger credit, with strings

The child tax credit is $2,200 per child under 17, indexed for inflation, and up to $1,700 of it is refundable for 2026. The child needs a Social Security number valid for work issued by the return's due date, and now at least one parent does too.

What matters from Chile: the refundable part is lost if you claim the foreign earned income exclusion. Families who use the foreign tax credit instead can receive it as a refund even when they owe no U.S. tax. We explain the choice in foreign tax credit or exclusion.

3. Trump accounts: $1,000 for children born 2025 to 2028

The law creates a new savings account for children. U.S. citizen children born between January 1, 2025 and December 31, 2028 who have a Social Security number can receive a one-time $1,000 deposit from the U.S. Treasury. Living in Chile does not disqualify them.

Parents elect the account on Form 4547, filed with the tax return. If your child was born in Chile, the practical first step is registering the birth with the U.S. consulate (the Consular Report of Birth Abroad) and then applying for the Social Security number. Contributions to the accounts started on July 4, 2026.

4. A new deduction for people 65 and over

From 2025 through 2028, each taxpayer aged 65 or over can deduct an extra $6,000, on top of the standard deduction. It phases out above $75,000 of modified adjusted gross income for single filers and $150,000 for joint filers, and requires a Social Security number. For retirees in Chile with a U.S. pension, Social Security benefits or IRA withdrawals, it can lower the U.S. tax that Chilean tax does not cover.

5. The $15 million estate and gift exemption is permanent

The exemption was set to fall by about half in 2026. Instead it is $15 million per person for 2026, indexed from 2027. It applies to U.S. citizens' worldwide assets, including property in Chile. Chileans who are not U.S. citizens or residents still have only the $60,000 threshold on U.S. assets. See U.S. property, gifts and estate tax.

6. Owners of a Chilean SpA: GILTI becomes NCTI

For tax years starting in 2026, GILTI is renamed net CFC tested income (NCTI). The deduction for corporations and section 962 filers drops from 50% to 40%, but the share of Chilean tax that can be credited rises from 80% to 90%. Owners of companies paying Chile's general corporate rate can usually still use the high-tax exclusion. Pro Pyme companies at 12.5% need a fresh calculation. See Form 5471 for a Chilean SpA or Ltda.

7. A 1% tax on cash remittances

From January 1, 2026, a 1% federal excise tax applies to money sent abroad through a remittance provider when the sender pays with cash, a money order, a cashier's check or a similar physical instrument. Transfers funded from a bank account or a U.S. debit or credit card are generally outside the tax. If family in the U.S. sends you money in Chile, a bank transfer avoids it.

8. Good news for Chileans investing in the U.S.: no "revenge tax"

Earlier drafts of the law included a proposed section 899, which would have raised U.S. withholding by up to 20 percentage points on income going to residents of countries whose taxes the U.S. considered unfair to U.S. companies. Chile's VAT on digital services could have put it on that list. The provision was dropped before the law passed.

The result is that the U.S.–Chile treaty works as signed. Dividends from U.S. companies to Chilean residents are generally withheld at 15%, or 5% for a company holding at least 10% of the voting stock, instead of the 30% default, and interest and capital gains keep their treaty limits. For Chilean families and businesses with U.S. investments, that is stability worth having.

What mostly does not apply from Chile

The new deductions for tips, overtime and car-loan interest are built around U.S. employment and U.S.-assembled vehicles, and rarely apply to Chilean wages. The 20% qualified business income deduction is permanent, but it covers U.S. business income, not profits earned through a Chilean company. Chilean contribuciones are still not deductible as an itemized deduction on the U.S. return.