When it was signed into law on July 4, 2025, the One Big Beautiful Bill Act delivered significant tax and regulatory overhauls. For construction companies, the changes created immediate and long-term planning opportunities, particularly in how tax positions, cash flow and capital deployment are affected. For contractors and CFOs, now is the moment to reassess strategy and get ahead of the impact, while keeping key partners in the loop, like your accounting team, banks and surety.
Know which tasks to tackle first. Whether it’s tax planning, strategic project selection or rethinking how you’ll deploy capital on work already in progress, a few key moves can help you build a firm foundation for success in 2026.
Work With CPA Advisors on Tax Planning and Projections
More than anything, working with a team of experts who live and breathe tax codes for the construction industry, planning and regulatory changes will produce great results and get things started on the right foot.
Owners and key finance leaders should work closely with their CPAs to build side-by-side tax projections that show their results before and after the OBBBA, so they can spot challenges early and find saving or deferral opportunities. These projections should factor in increased limits on interest deductions, related 100% depreciation deductions on equipment and vehicle or fleet purchases. Don’t forget to focus on planning income through the WIP schedule between years, while also checking that the business is set up to make the most of the now permanent 20% business income deduction for pass-through entities.
Companies should also look at new options for how certain multiunit residential or long-term contracts report revenue for tax purposes. Consider packaging the results in a way that helps with bank conversations, surety support and day-to-day cash planning.
Take Advantage of 100% Bonus Depreciation
One of the most beneficial parts of the OBBBA for contractors, especially specialty subcontractors, is the reinstatement of 100% bonus depreciation, while also doubling Section 179 limits. Purchases of qualifying equipment, machinery, heavy vehicles, certain types of software or other short-lived assets can be expensed in the first year the purchase is placed into service. You can now immediately deduct these costs.
This change creates a short-term tax advantage, but it also means that capital expenditure planning should prioritize assets that drive long-term efficiency, like upgrades to automation, modular systems and data-integrated project management tools. But before taking action, discuss any plans around cash-flow allocation with banking and surety partners.
Time Your Clean Energy Projects Wisely to Secure the Largest Credit
The OBBBA does keep several clean energy incentives, but it accelerates phase-outs for others. Any projects not under construction by mid-2026 may lose eligibility for key credits under prior legislation.
Contractors should reassess any construction plans on renewable generation or storage projects in order to meet the mid-2026 deadline. CFOs should evaluate the credit implications of the building process and work with CPA advisors and financing partners to avoid losing out on clean energy credits.
Innovative design and build-out work can also qualify for R&D tax credits, allowing you to get the tax credit for technical design work while also deducting the expenses of the work, including any research costs or wages, rather than amortizing those expenses over time.
Recalibrate Leverage and Interest Strategy
Section 163(j) is a part of the U.S. tax code that may limit how much interest a business can deduct on its tax return. But under OBBBA, taxpayers can once again add back depreciation and amortization in ATI calculations. This change makes it easier for growing and/or larger companies to deduct more of their interest costs before being phased out, as long as they manage their capital stack responsibly.
Lenders and sureties will continue to emphasize coverage ratios, cash-flow forecasting and working capital stability.
Review Estate and Succession Planning Structures
On Jan. 1, 2026, the OBBBA reinstated significant increases to the lifetime estate tax exemption of up to $15 million per person. Family-owned and closely held construction businesses should continue to make succession and family planning a major priority, even though the lifetime exclusion has been reinstated and will no longer be cut in half pending future legislation.
Coordination between tax advisors, legal counsel, key stakeholders, and surety and valuation advisors is important to align estate strategy with business continuity and bonding requirements. Keeping professionals in the loop with timely and forward-thinking communication is key. Additionally, estate planning around non-voting versus voting shares can provide substantial planning opportunities.
Leverage Workforce and Training Incentives
The lack of skilled tradespeople entering the industry has been a persistent problem for years, but some help could be coming via the expansion of Pell Grant eligibility and a new rule that will allow 529 Plan funds to be used for trade education, offering financial tools to strengthen skilled-labor pipelines. Contractors should integrate these provisions into recruitment and apprenticeship programs, particularly for field operations and equipment technology roles.
The OBBBA also contains a temporary, above-the-line deduction available for overtime compensation up to $12,500 for individuals and $25,000 for married filers (depending on income phase-outs).
The Bottom Line
The OBBBA reshapes the financial framework for construction companies, impacting tax structure, leverage and capital deployment across the industry. The firms that benefit most will be the ones that approach the law proactively through scenario planning, capital strategy and transparent communication with financial and key professional partners.
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