Bill Details
HR.609 - 119th Congress
Status
Latest action
2025-01-22 - Referred to the House Committee on Ways and Means.
Introduced Date
2025-01-22
Policy Area
Taxation
Committees
View committees (1)
Sponsors
Cosponsors
View cosponsors (20)
- Rep. Adams, Alma S. [D-North Carolina-12]
- Rep. Barragán, Nanette Diaz [D-California-44]
- Rep. Boyle, Brendan F. [D-Pennsylvania-2]
- Rep. Brownley, Julia [D-California-26]
- Rep. Carson, André [D-Indiana-7]
- Rep. Casar, Greg [D-Texas-35]
- Rep. Castro, Joaquin [D-Texas-20]
- Rep. Chu, Judy [D-California-28]
- Rep. Cohen, Steve [D-Tennessee-9]
- Rep. Davis, Danny K. [D-Illinois-7]
- Rep. DeGette, Diana [D-Colorado-1]
- Rep. DeLauro, Rosa L. [D-Connecticut-3]
- Rep. Deluzio, Christopher R. [D-Pennsylvania-17]
- Rep. Dingell, Debbie [D-Michigan-6]
- Rep. Escobar, Veronica [D-Texas-16]
- Rep. Espaillat, Adriano [D-New York-13]
- Rep. Fields, Cleo [D-Louisiana-6]
- Rep. Frost, Maxwell [D-Florida-10]
- Rep. Garamendi, John [D-California-8]
- Rep. Goldman, Daniel S. [D-New York-10]
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AI Summary This summary was generated by AI from the bill text. AI can get information wrong.
This bill would change how the tax on investment income works for wealthy people and would send that tax money to Medicare’s hospital insurance trust fund. In general, it would make more kinds of high-income business and investment earnings subject to the tax, especially for people with very large incomes. It also gives the Treasury Department rules to handle certain tax situations more clearly, including some foreign income and income that was already taxed before. Most of the changes would start with tax years after December 31, 2025.
- It directs the net investment income tax revenue into the Federal Hospital Insurance Trust Fund, which helps pay for Medicare hospital benefits.
- For people above certain income levels, the tax would apply to the greater of regular net investment income or a broader measure called “specified net income,” which can include some business income.
- The new rules would mainly affect individuals with income above $400,000, or above $500,000 for joint filers and surviving spouses. Married people filing separately would use half of the joint-filer amount.
- The bill also changes how the tax treats some trust and estate income, certain foreign-source income, and income that was already taxed under other parts of the tax code, and it tells the Treasury to issue guidance on these issues.
Official Summaries
Assuring Medicare’s Promise Act of 2025
This bill increases the net investment tax for certain taxpayers and appropriates revenue from the net investment tax to the Federal Hospital Insurance Trust Fund (which finances Medicare Part A). The bill also requires the Internal Revenue Service (IRS) to issue additional guidance on the net investment tax.
The bill requires individuals with a modified adjusted gross income (MAGI) exceeding $400,000 ($500,000 for joint filers and $250,000 for married individuals filing separately), estates, and trusts to pay a tax of 3.8% on the greater of their specified net income or net investment income, subject to limitations. (Under current law, individuals with a MAGI exceeding $200,000 [or $250,000 for joint filers], estates, and trusts pay a 3.8% tax on net investment income.)
The bill defines specified net income by expanding the definition of net investment income to
- include gross income from any trade or business (unless subject to employment taxes), including interest, dividends, annuities, royalties, and rents;
- include net gain from the disposition of business property;
- eliminate the exclusion of income from the investment of working capital; and
- eliminate the exception related to certain active partnership or S corporation interests.
The bill also
- expands the net investment tax definition of a trade or business,
- disallows net operating losses in calculating net investment income,
- includes certain foreign-sourced income in net investment income, and
- requires the IRS to issue guidance on the treatment of certain corporate distributions for purposes of the net investment tax.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 609 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 609
To amend the Social Security Act and the Internal Revenue Code of 1986
to include net investment income tax imposed in the Federal Hospital
Insurance Trust Fund and to modify the net investment income tax.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 22, 2025
Mr. Doggett (for himself, Ms. Adams, Ms. Barragan, Mr. Boyle of
Pennsylvania, Ms. Brownley, Mr. Carson, Mr. Casar, Mr. Castro of Texas,
Ms. Chu, Mr. Cohen, Mr. Davis of Illinois, Ms. DeGette, Ms. DeLauro,
Mr. Deluzio, Mrs. Dingell, Ms. Escobar, Mr. Espaillat, Mr. Fields, Mr.
Frost, Mr. Garamendi, Mr. Goldman of New York, Mr. Grijalva, Mr.
Huffman, Ms. Jayapal, Mr. Johnson of Georgia, Mr. Khanna, Ms. Lee of
Pennsylvania, Mr. Levin, Ms. Moore of Wisconsin, Ms. Norton, Ms.
Ocasio-Cortez, Ms. Pingree, Mr. Pocan, Mrs. Ramirez, Ms. Salinas, Ms.
Sanchez, Ms. Schakowsky, Ms. Tlaib, Mr. Tonko, Mr. Turner of Texas, Mr.
Veasey, Ms. Velazquez, Ms. Williams of Georgia, and Ms. Wilson of
Florida) introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Social Security Act and the Internal Revenue Code of 1986
to include net investment income tax imposed in the Federal Hospital
Insurance Trust Fund and to modify the net investment income tax.
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 ``Assuring Medicare's Promise Act of
2025''.
SEC. 2. INCLUSION OF NET INVESTMENT INCOME TAX IN HOSPITAL INSURANCE
TRUST FUND.
(a) In General.--Section 1817(a) of the Social Security Act (42
U.S.C. 1395i(a)) is amended--
(1) by striking ``and'' at the end of paragraph (1);
(2) by striking the period at the end of paragraph (2) and
inserting ``; and''; and
(3) by inserting after paragraph (2) the following new
paragraph:
``(3) the taxes imposed by section 1411 of the Internal Revenue
Code of 1986 reported to the Secretary of the Treasury or the
Secretary's delegate on tax returns under subtitle F of such Code.''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to taxes imposed for taxable years beginning after
December 31, 2025.
SEC. 3. APPLICATION OF NET INVESTMENT INCOME TAX TO TRADE OR BUSINESS
INCOME OF CERTAIN HIGH INCOME INDIVIDUALS.
(a) In General.--Section 1411 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(f) Application to Certain High Income Individuals.--
``(1) In general.--In the case of any individual whose
modified adjusted gross income for the taxable year exceeds the
high income threshold amount, subsection (a)(1) shall be
applied by substituting `the greater of specified net income or
net investment income' for `net investment income' in
subparagraph (A) thereof.
``(2) Phase-in of increase.--The increase in the tax
imposed under subsection (a)(1) by reason of the application of
paragraph (1) of this subsection shall not exceed the amount
which bears the same ratio to the amount of such increase
(determined without regard to this paragraph) as--
``(A) the excess described in paragraph (1), bears
to
``(B) $100,000 (\1/2\ such amount in the case of a
married taxpayer (as defined in section 7703) filing a
separate return).
``(3) High income threshold amount.--For purposes of this
subsection, the term `high income threshold amount' means--
``(A) except as provided in subparagraph (B) or
(C), $400,000,
``(B) in the case of a taxpayer making a joint
return under section 6013 or a surviving spouse (as
defined in section 2(a)), $500,000, and
``(C) in the case of a married taxpayer (as defined
in section 7703) filing a separate return, \1/2\ of the
dollar amount determined under subparagraph (B).
``(4) Specified net income.--For purposes of this section,
the term `specified net income' means net investment income
determined--
``(A) without regard to the phrase `other than such
income which is derived in the ordinary course of a
trade or business not described in paragraph (2),' in
subsection (c)(1)(A)(i),
``(B) without regard to the phrase `described in
paragraph (2)' in subsection (c)(1)(A)(ii),
``(C) without regard to the phrase `other than
property held in a trade or business not described in
paragraph (2)' in subsection (c)(1)(A)(iii),
``(D) without regard to paragraphs (2), (3), and
(4) of subsection (c), and
``(E) by treating paragraphs (5) and (6) of section
469(c) (determined without regard to the phrase `To the
extent provided in regulations,' in such paragraph (6))
as applying for purposes of subsection (c) of this
section.''.
(b) Application to Trusts and Estates.--Section 1411(a)(2)(A) of
such Code is amended by striking ``undistributed net investment
income'' and inserting ``the greater of undistributed specified net
income or undistributed net investment income''.
(c) Clarifications With Respect to Determination of Net Investment
Income.--
(1) Certain exceptions.--Section 1411(c)(6) of such Code is
amended to read as follows:
``(6) Special rules.--Net investment income shall not
include--
``(A) any item taken into account in determining
self-employment income for such taxable year on which a
tax is imposed by section 1401(b),
``(B) wages received with respect to employment on
which a tax is imposed under section 3101(b) or 3201(a)
(including amounts taken into account under section
3121(v)(2)), and
``(C) wages received from the performance of
services earned outside the United States for a foreign
employer.''.
(2) Net operating losses not taken into account.--Section
1411(c)(1)(B) of such Code is amended by inserting ``(other
than section 172)'' after ``this subtitle''.
(3) Inclusion of certain foreign income.--
(A) In general.--Section 1411(c)(1)(A) of such Code
is amended by striking ``and'' at the end of clause
(ii), by striking ``over'' at the end of clause (iii)
and inserting ``and'', and by adding at the end the
following new clause:
``(iv) any amount includible in gross
income under section 951, 951A, 1293, or 1296,
over''.
(B) Proper treatment of certain previously taxed
income.--Section 1411(c) of such Code is amended by
adding at the end the following new paragraph:
``(7) Certain previously taxed income.--The Secretary shall
issue regulations or other guidance providing for the treatment
of--
``(A) distributions of amounts previously included
in gross income for purposes of chapter 1 but not
previously subject to tax under this section, and
``(B) distributions described in section 962(d).''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
(e) Transition Rule.--The regulations or other guidance issued by
the Secretary under section 1411(c)(7) of the Internal Revenue Code of
1986 (as added by this section) shall include provisions which provide
for the proper coordination and application of clauses (i) and (iv) of
section 1411(c)(1)(A) with respect to--
(1) taxable years beginning on or before December 31, 2025,
and
(2) taxable years beginning after such date.
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