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Working Class Bonus Tax Relief Act of 2025
To amend the Internal Revenue Code of 1986 to establish a deduction for certain amounts received as a bonus.
Summary
This bill creates a federal income tax deduction for bonuses received by individuals. The deduction allows taxpayers to deduct up to 15 percent of their non-bonus wages from their bonuses—for example, a worker earning $60,000 in regular wages could deduct up to $9,000 of a bonus. The deduction is available only to individuals with adjusted gross income below $100,000 (or $150,000 for heads of household, or $200,000 for married couples filing jointly), targeting lower and middle-income earners. The deduction applies whether or not the taxpayer itemizes deductions and is not subject to the usual limitations on miscellaneous deductions. The deduction expires after December 31, 2029.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Rep. Bacon, Don [R-NE-2] (R-NE)
Actions (2)
- Jan 20, 2025 Referred to the House Committee on Ways and Means. · house
- Jan 20, 2025 Introduced in House
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Text versions (1)
Bills are re-published as they move (Introduced → Reported → Engrossed → Enrolled …). Each stage below is a separate text; pick two to see what changed. Data from Congress.gov.
Full text
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. <all>
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