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119-hr-557119th CongressWALLET

Working Class Bonus Tax Relief Act of 2025

Sponsored By: Representative Bacon, Don [R-NE-2]

Introduced

Summary

This bill would create a temporary bonus tax deduction for certain employee bonuses. It would let workers deduct up to 15% of their regular wages from the same employer against qualifying bonus pay through December 31, 2029.

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  • Workers and families: Workers who receive bonuses could reduce their taxable income on part of that pay by claiming the new bonus deduction.
  • Non-itemizers: The bill treats the bonus deduction as allowable for people who take the standard deduction so they can benefit without itemizing.
  • Married filers: Married couples filing jointly with adjusted gross income over $200,000 cannot claim the deduction.
  • Other filers: Heads of household over $150,000 and other individual filers over $100,000 are excluded from the deduction.
  • Employers and payroll: Withholding tables and payroll procedures must be updated so bonus withholding reflects the new deduction.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 1 benefits, 0 costs, 0 mixed.

Tax break on worker bonuses

If enacted, workers could deduct part of cash bonuses from taxes. The deductible part would be capped at 15% of your non-bonus wages from that employer. It also could not exceed the bonus itself. Your AGI must be at or below $200,000 (married filing jointly), $150,000 (head of household), or $100,000 (others). You could claim it even if you do not itemize. It would not count against itemized deduction limits. It would apply to bonuses paid after enactment. It would end for bonuses paid after December 31, 2029. IRS withholding rules would be updated to reflect the deduction.

Sponsors & CoSponsors

Sponsor

Bacon, Don [R-NE-2]

NE • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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