No Taxation Without Operation Act
Sponsored By: Representative Bresnahan
Introduced
Summary
This bill would suspend Federal individual income tax liability on wages during any partial or full government shutdown caused by a lapse in appropriations. It would also exclude backpay for certain furloughed federal employees and contractors from Federal income tax and direct Treasury to issue employer guidance.
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- Workers and households: Individuals subject to ordinary Federal income taxes on wages would not owe Federal income tax during the shutdown period, and they would not accrue penalties or interest for individual income tax payments or returns tied to that period.
- Furloughed federal employees and contractors: For those covered by the Government Employee Fair Treatment Act of 2019, backpay owed for furloughs or work without pay would be exempt from Federal income tax.
- Employers and different pay types: The Treasury Department must publish guidelines so employers can apply the rules to tipped employees, hourly wage workers, salaried employees, and other covered employees.
- Scope trigger: The bill defines a "partial or full government shutdown" as any period when a lapse in Federal appropriations results in a partial or full government shutdown so the tax rules apply during those lapses.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
No income tax on wages during shutdown
If enacted, this would pause federal income tax on wages you earn during a partial or full federal shutdown caused by a funding lapse. You would not owe federal income tax on those wages while the shutdown lasts. You also would not be charged penalties or interest for missed individual income tax payments or returns during that period. This would apply only to wage income that is normally taxed.
Shutdown backpay tax-free for furloughed workers
If enacted, furloughed federal workers and contractors covered by the Government Employee Fair Treatment Act of 2019 would not owe federal income tax on their shutdown backpay. You must be furloughed or working without pay during a shutdown for this to apply. The exclusion would cover backpay tied to the shutdown period.
Treasury payroll guidance for shutdowns
If enacted, the Treasury Department would issue guidance to help employers follow these shutdown tax rules. The guidance would cover tipped, hourly, salaried, and other workers so payroll is handled correctly while a shutdown lasts.
Sponsors & CoSponsors
Sponsor
Bresnahan
PA • R
Cosponsors
Wied
WI • R
Sponsored 10/14/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov