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119-hr-6872119th CongressWALLET

Holiday Bonus Tax Relief Act of 2025

Sponsored By: Representative Mackenzie, Ryan [R-PA-7]

Introduced

Summary

This bill would let workers exclude up to $2,500 of employer-paid holiday bonuses from their taxable income. It would also require employers to report those bonuses on Form W-2 and allow the $2,500 limit to be adjusted for inflation for years after 2026.

Show full summary
  • Employees: Workers could exclude qualified holiday bonuses paid in January, November, or December, up to $2,500 per person. The $2,500 cap would be indexed for inflation for taxable years after 2026.
  • Employers: Employers would need to show the total qualified holiday bonuses on each employee's Form W-2, which may require payroll and reporting updates. The exclusion would apply to bonuses received on or after November 1, 2025.
  • Tax administration: The Secretary would be authorized to issue regulations or guidance to prevent reclassification of pay or other abuse of the exclusion.

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Bill Overview

Analyzed Economic Effects

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

Lower taxes on holiday bonuses

If enacted, you would be able to exclude up to $2,500 of employer-paid holiday bonuses from your taxable income each year. The bonus must be a holiday, end-of-year, or similar bonus paid in January, November, or December. The $2,500 limit would be adjusted for inflation for taxable years beginning after 2026 and rounded to the nearest $100. This would apply to bonuses received on or after November 1, 2025, in taxable years ending after that date. Employers would have to show the total qualified holiday bonuses on your Form W-2, and the Treasury Secretary would be able to issue rules to stop improper reclassification or abuse.

Sponsors & CoSponsors

Sponsor

Mackenzie, Ryan [R-PA-7]

PA • R

Cosponsors

  • Rep. Moskowitz, Jared [D-FL-23]

    FL • D

    Sponsored 12/18/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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