Working Class Bonus Tax Relief Act of 2025
Working Class Bonus Tax Relief Act of 2025
Plain Language Summary
# Working Class Bonus Tax Relief Act of 2025 – Summary **What the Bill Would Do** This bill would allow workers to deduct a portion of bonuses they receive from their taxes, but only under certain conditions. The deduction would be limited to 15% of the regular wages earned from the same employer, and it would only be available through 2029. For example, if an employee earned $50,000 in regular wages and received a $10,000 bonus, they could potentially deduct up to $7,500 (15% of $50,000) from their taxable income. **Who It Affects and Key Limits** The tax break is designed for lower- and middle-income workers, as eligibility phases out for higher earners. Single filers with annual income over $100,000, heads of household earning more than $150,000, and married couples filing jointly earning more than $200,000 would not qualify for the deduction.
This means the benefit is restricted to individuals and families below these income thresholds. **Current Status** The bill is currently in committee, meaning it has been introduced but has not yet advanced to a full vote in the House of Representatives. It was sponsored by Rep. Don Bacon, a Republican from Nebraska.
CRS Official Summary
Working Class Bonus Tax Relief Act of 2025This 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).
Latest Action
Referred to the House Committee on Ways and Means.