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S2779119th CongressWALLET

Tax Cut for Striking Workers Act of 2025

Sponsored By: Senator Gallego, Ruben [D-AZ]

Introduced

Summary

Excluding strike benefits from taxable income would let union-paid replacement pay be tax-free for recipients. It would also update the earned income tax credit so the exclusion is reflected in EITC calculations.

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  • Workers: Striking workers who receive replacement pay from a tax-exempt labor organization would not include that pay in federal gross income for income tax purposes.
  • Earned Income Tax Credit filers and preparers: The bill would amend EITC rules to account for the new exclusion so filings treat excluded strike benefits consistently.
  • Effective date: The exclusion would apply to compensation received after December 31, 2025.

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Bill Overview

Analyzed Economic Effects

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

Lower taxes on union strike pay

If enacted, replacement pay your union gives after December 31, 2025 would not count as federal taxable income. It applies to payments from tax-exempt 501(c)(5) unions to members. The payments must replace wages lost to a strike, lockout, or a Railway Labor Act work stoppage. Those payments also would not count as earned income when calculating the Earned Income Tax Credit. Households that get these payments could pay less federal income tax and may get a larger EITC or keep eligibility.

Sponsors & CoSponsors

Sponsor

Gallego, Ruben [D-AZ]

AZ • D

Cosponsors

  • Sen. Wyden, Ron [D-OR]

    OR • D

    Sponsored 9/11/2025

  • Sen. Fetterman, John [D-PA]

    PA • D

    Sponsored 9/11/2025

  • Sen. Gillibrand, Kirsten E. [D-NY]

    NY • D

    Sponsored 9/11/2025

  • Sen. Van Hollen, Chris [D-MD]

    MD • D

    Sponsored 9/11/2025

  • Sen. Blumenthal, Richard [D-CT]

    CT • D

    Sponsored 9/11/2025

  • Sen. Booker, Cory A. [D-NJ]

    NJ • D

    Sponsored 9/11/2025

  • Sen. Merkley, Jeff [D-OR]

    OR • D

    Sponsored 9/11/2025

  • Sen. Schatz, Brian [D-HI]

    HI • D

    Sponsored 9/11/2025

  • Sen. Baldwin, Tammy [D-WI]

    WI • D

    Sponsored 9/11/2025

  • Sen. Schiff, Adam B. [D-CA]

    CA • D

    Sponsored 9/30/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
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