Employee Profit-Sharing Encouragement Act of 2025

This bill requires corporations (specifically "specified employers" meeting gross receipts thresholds) to make qualified profit-sharing distributions to employees before they can deduct executive pay for highly compensated individuals. To qualify, employers must distribute at least 5% of net income as cash payments to employees with at least one year of service, based on company profits, while meeting nondiscrimination rules similar to 401(k) plans. The provision applies to taxable years beginning after the bill's enactment, linking tax deductions directly to profit-sharing practices. It does not affect non-corporate employers or small businesses below the gross receipts threshold.