Mom and Pop Tax Relief Act
Sponsored By: Representative Moore (WI)
Introduced
Summary
Would cap the qualified business income deduction at $25,000 per taxpayer. It would also add an adjusted gross income phaseout at $200,000 for single filers and $400,000 for joint filers, tighten how W-2 wages are measured, and narrow which trades qualify.
Show full summary
- Small business owners and families that rely on pass-through income would see their combined deduction limited to $25,000 per taxpayer, reducing the tax benefit for households with multiple businesses. This applies to tax years beginning after December 31, 2025.
- Higher-income pass-through owners would lose deduction value as adjusted gross income exceeds $200,000 for individuals and $400,000 for joint filers, with the deduction reduced by the excess AGI and not allowed below zero.
- Employers and tax preparers face a narrower W-2 wage test. W-2 wages must match amounts described in section 6051, be allocable to domestic production receipts, and wages not filed with the Social Security Administration within 60 days are excluded from the wage measure.
- The bill simplifies certain loss carryover rules and adds explicit guidance for short taxable years and for cases where a taxpayer acquires or disposes of a major portion of a trade or business.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 0 benefits, 1 costs, 0 mixed.
New cap on small-business income deduction
If enacted, this would cap the pass-through business income deduction at $25,000 per taxpayer each year. It would replace the current 20% formula and then cut that cap by how much your adjusted gross income (AGI) is over $200,000 ($400,000 for joint filers). Only trades or businesses, not employee wages, would qualify. It would tighten which W-2 wages count—only certain domestic-production wages reported to Social Security on time—and remove a loss carryover rule. These changes would start for tax years beginning after December 31, 2025, and many owners could owe more federal income tax.
Sponsors & CoSponsors
Sponsor
Moore (WI)
WI • D
Cosponsors
Davis (IL)
IL • D
Sponsored 5/7/2025
Chu
CA • D
Sponsored 5/7/2025
Velazquez
NY • D
Sponsored 5/7/2025
McCollum
MN • D
Sponsored 5/7/2025
Latimer
NY • D
Sponsored 5/7/2025
McIver
NJ • D
Sponsored 5/19/2025
McDonald Rivet
MI • D
Sponsored 5/21/2025
Roll Call Votes
No roll call votes available for this bill.
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