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Tax Relief for Employee Bonuses: Lower Taxes on Extra Earnings

This act introduces a new tax deduction allowing employees to deduct a portion of their received bonuses from their taxable income. This means individuals receiving bonuses may pay less in taxes, increasing their disposable income. The deduction is applicable until the end of 2029 and targets low to middle-income earners.
Key points
You can deduct up to 15% of your bonus, but not more than 15% of your regular wages from the same employer.
The deduction is available for individuals whose annual adjusted gross income does not exceed $200,000 for married couples, $150,000 for heads of household, and $100,000 for other individuals.
Tax changes will apply to amounts received after the act's enactment date and will be in effect until December 31, 2029.
The tax withholding system will be adjusted to reflect this new deduction, potentially leading to lower paycheck deductions.
article Official text account_balance Process page
Introduced
Citizen Poll
No votes cast
Additional Information
Print number: 119_HR_557
Sponsor: Rep. Bacon, Don [R-NE-2]
Process start date: 2025-01-20
Lustra uses Artificial Intelligence. Verify details in source documents.
Summarized by: gemini-2.5-flash
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Working Class Bonus Tax Relief Act of 2025

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_557.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-01-20.

What are the main provisions?

Key points include:

  • You can deduct up to 15% of your bonus, but not more than 15% of your regular wages from the same employer.
  • The deduction is available for individuals whose annual adjusted gross income does not exceed $200,000 for married couples, $150,000 for heads of household, and $100,000 for other individuals.
  • Tax changes will apply to amounts received after the act's enactment date and will be in effect until December 31, 2029.
  • The tax withholding system will be adjusted to reflect this new deduction, potentially leading to lower paycheck deductions.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Bacon, Don [R-NE-2].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-23.

CATEGORIES

Taxes Labor