US Federal 2025-2026 Regular Session

US Federal House Bill HB557

Introduced
1/20/25  

Caption

Working Class Bonus Tax Relief Act of 2025This bill allows a tax deduction for bonuses received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 15% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for individuals with annual adjusted gross income exceeding $100,000 (or $150,000 for heads of the household and $200,000 for married couples filing a joint return).  

Impact

If enacted, HB557 could significantly benefit lower and middle-income workers who receive bonuses from their employers. By allowing these individuals to offset their taxable income by a portion of their bonuses, the bill aims to enhance disposable income and stimulate economic activity. Furthermore, the bill stands to provide relief specifically to the working class, who are often the most affected by rising costs of living. However, the proposed income limits mean that higher earners would not benefit from this tax incentive, which may serve as a point of contention among various stakeholders.

Summary

House Bill 557, titled the 'Working Class Bonus Tax Relief Act of 2025', aims to amend the Internal Revenue Code to provide tax deductions for certain bonuses received by individuals. The proposed legislation allows taxpayers to deduct bonuses that do not exceed 15% of their non-bonus wages from the same employer within a taxable year. This deduction is limited to individuals whose adjusted gross income does not exceed specified thresholds, namely $200,000 for married couples filing jointly, $150,000 for heads of households, and $100,000 for other individuals. The bill also stipulates that no deductions will be permissible for amounts received after December 31, 2029.

Contention

Discussions surrounding HB557 may lead to differing opinions on its fairness and effectiveness. Proponents of the bill argue that it recognizes the contributions of workers and seeks to return value to individuals who may struggle with high tax burdens on bonuses they earn. Critics, on the other hand, may raise concerns about government intervention in tax policy and point out that the specific income caps could exclude many deserving workers, particularly in higher cost-of-living areas. This tension reflects broader debates on tax equity and the role of the government in supporting working-class families.

Congress_id

119-HR-557

Policy_area

Taxation

Introduced_date

2025-01-20

Companion Bills

No companion bills found.

Previously Filed As

US HB561

Overtime Pay Tax Relief Act of 2025This bill allows a tax deduction for overtime compensation received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 20% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for an individual with adjusted gross income exceeding $100,000 (or $150,000 for a head of the household and $200,000 for a married couple filing a joint return).  

US HB246

SALT Fairness for Working Families ActThis bill increases the limitation on the federal tax deduction for state and local taxes (commonly known as the SALT deduction cap) to $15,000 ($30,000 for married individuals filing a joint federal income tax return). Under current law, the SALT deduction cap is $10,000 ($5,000 for a married individuals filing separate federal income tax returns).

US HB559

Seniors in the Workforce Tax Relief ActThis bill establishes a new above-the-line federal tax deduction through 2029 for individuals who attain the age of 65 before the end of the tax year. (Above-the-line deductions are subtracted from gross income to calculate adjusted gross income.)Under the bill, the amount of the tax deduction is $25,000 for individuals (or $50,000 for joint filers and surviving spouses) and begins to phase out for individuals with an adjusted gross income over $100,000 (or $200,000 for joint filers and surviving spouses). 

US HB320

Make Marriage Great Again Act of 2025This bill modifies the federal income tax rate brackets for married individuals filing joint federal income tax returns so that they are twice the amount of the federal income tax rate brackets for unmarried individuals filing federal income tax returns (thus eliminating the tax effect commonly known as the marriage penalty). Further, under the bill, the federal income tax rate brackets for married individuals filing separate federal income tax returns no longer applies for tax years beginning after December 31, 2024.

US SB35

Homeowners Premium Tax Reduction Act of 2025 This bill establishes a new deduction of up to $10,000 claimed against gross income (above-the-line tax deduction) for annual policy premiums paid or incurred for homeowners insurance on an individual's principal residence. 

US HB11

This bill provides a tax deduction for health insurance premiums paid to provide medical insurance coverage for an individual, the individual’s spouse, and the individual’s dependents. Under the bill, the tax deduction may be claimed as an adjustment to income (also known as an above-the-line tax deduction), which does not require the individual to itemize deductions. 

US HB05550

An Act Concerning The Qualifying Income Thresholds For Certain Personal Income Tax Deductions For Married Individuals Filing Jointly.

US HB558

Tip Tax Termination Act This bill excludes from gross income for federal tax purposes up to $20,000 of eligible tips received during the tax year. The bill also requires the Internal Revenue Service to modify the tables and procedures used to withhold federal income tax from wages to take into account eligible tips excluded from gross income. The bill defines eligible tips as amounts received while performing services in a position that generally relies on tips as part of wages, including cosmetology, hospitality, and food service.Further, under the bill, the amount of eligible tips excluded from gross income must not be included in determining federal tax deductions or credits, except for purposes of calculating the child tax credit and earned income tax credit.Finally, the exclusion from gross income only applies to eligible tips received before 2030.

US SB253

Abortion Is Not Health Care Act of 2025This bill excludes amounts paid for an abortion from the itemized tax deduction for qualified medical and dental expenses, subject to exceptions. Under current law, individuals who itemize their tax deductions may deduct qualified medical and dental expenses to the extent that such expenses exceed 7.5% of the individual’s adjusted gross income for the tax year. Further, under current law, the calculation of the itemized tax deduction for medical and dental expenses may include amounts paid for a legal abortion.Under the bill, amounts paid for an abortion may not be claimed as part of the itemized deduction for medical and dental expenses. However, under the bill, amounts paid for an abortion may be included in the itemized deduction for medical and dental expenses if (1) the pregnancy is the result of rape or incest; or (2) a woman is suffering from a physical disorder, injury, or illness (including a life-endangering physical condition caused by or arising from the pregnancy itself) that would, as certified by a physician, place the woman in danger of death if an abortion were not performed.

US SB226

Allowing an itemized deduction for certain losses from wagering transactions for individuals for income tax purposes.

Similar Bills

No similar bills found.