Bill Details
HR.557 - 119th Congress
Status
Latest action
2025-01-20 - Referred to the House Committee on Ways and Means.
Introduced Date
2025-01-20
Policy Area
Taxation
Committees
View committees (1)
Sponsors
8
0
0
AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would let some workers deduct part of certain bonuses from their federal taxes. The deduction would cover bonus pay up to 15% of a worker’s regular wages from the same employer in that year. It would only be available to people below certain income levels, and it would end after 2029. The bill also says the deduction would work for both people who itemize and people who do not, and the IRS would need to update withholding rules to reflect it.
- The deduction would apply only to bonuses received from the same employer as the worker’s regular wages.
- The amount that could be deducted is limited to 15% of that worker’s non-bonus wages for the year.
- People with higher incomes would not qualify: over $200,000 for joint filers, $150,000 for heads of household, and $100,000 for other taxpayers.
- The change would apply to bonus payments received after the bill becomes law, and the deduction would stop after December 31, 2029.
Official Summaries
Working Class Bonus Tax Relief Act of 2025
This bill allows a tax deduction for bonuses received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 15% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for individuals with annual adjusted gross income exceeding $100,000 (or $150,000 for heads of the household and $200,000 for married couples filing a joint return).
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 557 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 557
To amend the Internal Revenue Code of 1986 to establish a deduction for
certain amounts received as a bonus.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 20, 2025
Mr. Bacon introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish a deduction for
certain amounts received as a bonus.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Working Class Bonus Tax Relief Act
of 2025''.
SEC. 2. DEDUCTION FOR BONUSES.
(a) In General.--
(1) Deduction allowed.--Part VII of subchapter B of chapter
1 of the Internal Revenue Code of 1986 is amended by
redesignating section 224 as section 225 and by inserting after
section 223 the following new section:
``SEC. 224. BONUSES.
``(a) In General.--There shall be allowed as a deduction an amount
equal to so much of any bonus received by an individual as does not
exceed 15 percent of such individual's non-bonus wages from the same
employer for the taxable year.
``(b) Limitation.--No deduction shall be allowed under subsection
(a) for any taxpayer whose adjusted gross income for the taxable year
exceeds--
``(1) in the case of a married couple filing jointly,
$200,000,
``(2) in the case of a head of household, $150,000, or
``(3) in the case of any other individual, $100,000.
``(c) Termination.--No deduction shall be allowed under subsection
(a) for any amounts received after December 31, 2029.''.
(2) Conforming amendment.--The table of sections for part
VII of subchapter B of chapter 1 of such Code is amended by
redesignating the item relating to section 224 as relating to
section 225 and by inserting after the item relating to section
223 the following new item:
``Sec. 224. Bonuses.''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of paragraph (3), by striking the period at the end of paragraph (4)
and inserting ``and'', and by adding at the end the following new
paragraph:
``(5) the deduction provided in section 224.''.
(c) Non-Application of Certain Limitations for Itemizers.--
(1) Deduction not treated as a miscellaneous itemized
deduction.--Section 67(b) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of paragraph (11), by
striking the period at the end of paragraph (12) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(13) the deduction under section 224 (relating to
bonuses).''.
(2) Deduction not taken into account under overall
limitation.--Section 68(c) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(4) the deduction under section 224 (relating to
bonuses).''.
(d) Withholding.--The Secretary of the Treasury (or the Secretary's
delegate) shall modify the tables and procedures prescribed under
section 3402(a) of the Internal Revenue Code of 1986 to take into
account the deduction allowed under section 224 of such Code (as added
by this Act).
(e) Effective Date.--The amendments made by this section shall
apply to amounts received after the date of the enactment of this Act.
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