Holiday Bonus Tax Relief Act of 2025

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6872 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 6872

 To amend the Internal Revenue Code of 1986 to exclude holiday bonuses 
               from gross income, and for other purposes.


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                    IN THE HOUSE OF REPRESENTATIVES

                           December 18, 2025

Mr. Mackenzie (for himself and Mr. Moskowitz) introduced the following 
      bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to exclude holiday bonuses 
               from gross income, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Holiday Bonus Tax Relief Act of 
2025''.

SEC. 2. EXCLUSION FROM GROSS INCOME OF HOLIDAY BONUSES.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139L the following new section:

``SEC. 139M. QUALIFIED HOLIDAY BONUSES.

    ``(a) In General.--Gross income shall not include any qualified 
holiday bonus.
    ``(b) Limitation.--
            ``(1) In general.--The amount which may be excluded under 
        subsection (a) with respect to any individual shall not exceed 
        $2,500.
            ``(2) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2026, the $2,500 amount 
        in paragraph (1) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2025' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
        Any increase determined under the preceding sentence shall be 
        rounded to the nearest multiple of $100.
    ``(c) Qualified Holiday Bonus.--For purposes of this section, the 
term `qualified holiday bonus' means, with respect to a taxable year, 
any holiday, end-of-year, or similar bonus that is paid by an employer 
to an employee during the month of January, November, or December of 
such taxable year.
    ``(d) Regulations.--The Secretary shall prescribe such regulations 
or other guidance as may be necessary to prevent reclassification of 
income as a qualified holiday bonus, including regulations or other 
guidance to prevent abuse of the exclusion allowed by this section.''.
    (b) Qualified Holiday Bonuses Required To Be Shown on W-2.--Section 
6051(a) of such Code is amended by striking ``and'' at the end of 
paragraph (18), by striking the period at the end of paragraph (19) and 
inserting ``, and'', and by inserting after paragraph (19) the 
following new paragraph:
            ``(20) the total amount of qualified holiday bonuses (as 
        defined in section 139M(c)).''.
    (c) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139L the following new item:

``Sec. 139M. Qualified holiday bonuses.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to bonuses received on or after November 1, 2025, in taxable 
years ending after such date.
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