President Donald Trump’s “One Big Beautiful Bill Act” is another step closer to becoming law after the U.S. Senate narrowly voted on July 1 to advance the signature legislation of Trump’s second term.
The massive budget reconciliation bill, which members of Congress have debated for months, could significantly impact Hoosiers through spending and tax cuts that will affect access to government programs, such as Medicaid.
Independent polls in recent weeks have shown that Americans have unfavorable views of the “One Big Beautiful Bill,” but Indiana’s congressional delegation has fallen largely along party lines in voting on the legislation. Hoosier Republicans in the House and Senate have supported Trump’s agenda while Democrats opposed it.
Before the bill heads to Trump’s desk, it must pass a final vote in the House, which could begin voting on July 2.
Here are four ways the bill is likely to impact Hoosiers once it is signed into law.
Fewer Hoosiers could qualify for Medicaid and SNAP
Thousands of Hoosiers could lose access to Medicaid, the public health insurance program for low-income Americans, and SNAP benefits under the bill.
The Senate’s version of the bill gradually decreases the cap on provider taxes, which are taxes paid by hospitals that Indiana relies on to fund its Medicaid expansion program, otherwise known as the Healthy Indiana Plan. In mid-June, state leaders warned that the Senate’s plan to reduce the provider tax from 6% to 3.5% would make the state unable to afford the current costs of HIP. The state would have to ask the Trump administration for the flexibility to enroll fewer Hoosiers.
In the final days of negotiations in the Senate, lawmakers added a $50 billion fund to support rural hospitals and appease senators who were concerned about Medicaid cuts. It’s unclear at this point how much Indiana would get from that $50 billion fund.
The One Big Beautiful Bill Act also establishes work requirements for adults receiving Medicaid. It also expands the age limits on work requirements for adults receiving food stamps, or the federal nutrition program known as SNAP.
Hoosier adults who are eligible for Medicaid must work a minimum of 80 hours a month starting in late 2026, according to the bill. It also raises the working age threshold from 55 to 64 for adults receiving food stamps, which means some older Hoosiers may have to work longer to receive nutrition assistance.
More than 1.9 million Hoosiers are currently on Medicaid, according to FSSA enrollment numbers. In April 2025, more than 588,000 Hoosiers received SNAP benefits.
Independent of the Medicaid provisions in federal legislation, Indiana already passed legislation seeking to institute work requirements for the Healthy Indiana Plan, which means the federal working requirements may not make a huge difference in eligibility. As of July 1, the state has yet to submit a waiver request to the federal government to establish the work requirements lawmakers approved earlier this year.
An analysis of 2024 Census data from the Kaiser Family Foundation shows 72% of adults on Medicaid in Indiana are working.
Saving expiring 2017 tax cuts
Several provisions of the Tax Cuts and Jobs Act, which Congress passed during Trump’s first term, expire at the end of this year, but the “One Big Beautiful Bill” would make those tax cuts permanent.
According to the nonpartisan Tax Foundation, an expiration of the 2017 tax cuts would result in an average tax increase of $1,936 for Hoosiers starting in 2026.
But the bill goes beyond the 2017 tax cuts and includes additional provisions, such as a temporary deduction for seniors and making auto loan interest deductible for vehicles made in the U.S. An analysis from the Institute on Taxation and Economic Policy, another nonpartisan group, estimates that Hoosiers earning $144,000 and above would receive the largest share of tax cuts in the bill.
According to the U.S. Census, the median household income in Indiana between 2019 and 2023 was around $70,000. Hoosiers with that income, per the ITEP analysis, might see about a $1,700 tax cut in 2026 from the provisions in the bill.
Eliminates clean energy tax credits
Hoosier homeowners that seek tax credits for clean energy upgrades will lose access to thousands of dollars in incentives under the bill.
Home upgrades and improvements, such as solar panel or battery installations, can be costly, but the current 30% credit on purchases in existing law can help offset costs, advocates previously told IndyStar.
Big Beautiful Bill 101: What you need to know about Trump’s tax bill
Many of these existing incentives were scheduled to sunset in the 2030s, several years from now, but under the Senate-passed legislation they would expire later this year or by mid-2026.
In addition to making it harder for Hoosiers to afford energy efficient upgrades, advocates previously told IndyStar they are also concerned about the impact ending these credits could have on the more than 4,000 solar jobs in the state.
Short term tax breaks on tips and overtime
Hoosiers who regularly work overtime hours or work in industries that receive tips may receive short-term tax benefits on those dollars under the “One Big Beautiful Bill.”
Specifically, the bill makes up to $12,500 worth of overtime pay tax deductible, or $25,000 for joint tax filers. For Hoosiers working in tipped industries, their initial $25,000 earned in tips would also be tax deductible. Both provisions would expire after 2028.
Mitch Olson, one of the founders of Olson Custom Designs in Indianapolis, said in June the elimination of taxes on overtime benefits their 80 employees by putting more money in their pockets – and it could help the manufacturing company grow their business.
“Passing along that savings back to our employees is crucial to recruit more employees and to help advance the ones we currently already have,” he told reporters in June.
IndyStar reporter Karl Schneider contributed to this story.
Contact IndyStar state government and politics reporter Brittany Carloni at brittany.carloni@indystar.com. Follow her on Twitter/X @CarloniBrittany.
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This article originally appeared on Indianapolis Star: How Trump’s ‘big bill’ impacts Indiana, from Medicaid to tax cuts