S 1046, the "No Tax On Overtime Act of 2025," would exclude overtime pay earned under the Fair Labor Standards Act (FLSA) from taxable gross income. This directly affects hourly workers who receive legally required overtime compensation (typically 1.5 times regular pay for hours over 40 per week). The bill amends the tax code to add a new provision stating that such overtime pay is not included when calculating federal income tax liability. The change would take effect for overtime pay received after the bill's enactment date.
This bill exempts from federal income tax payments received as judgments, awards, or settlements related to sexual assault or sexual harassment claims. It directly affects survivors who win such claims, including amounts for back pay, punitive damages, attorney fees, and other related payments. Key provisions amend the tax code to exclude these specific payments from taxable income, social security taxes, railroad retirement taxes, unemployment taxes, and wage withholding. The law applies to taxable years beginning after the bill's enactment date.
The BOOST Act of 2025 establishes a new monthly $250 payment program for qualifying adults aged 19 to 67 who are U.S. citizens, nationals, or certain qualified immigrants residing in the U.S. These payments, adjusted annually for inflation, are funded by a new 2.5% supplemental tax on adjusted gross income exceeding $60,000 for joint filers (or $30,000 for individuals). The tax applies to all taxable income above these thresholds with no deductions or credits allowed, and the payments are excluded from income calculations for other federal benefits. The Social Security Administration’s new Office of Universal Adult Assistance will administer the program, including eligibility verification and annual reporting to Congress.
This bill exempts active and reserve uniformed service members' active-duty pay from federal income tax. It directly affects military personnel serving in the U.S. Armed Forces, including the Army, Navy, Air Force, Marines, and Coast Guard. The key provision adds a new tax code section (139M) excluding "compensation received in connection with service" from taxable income, but explicitly excludes retirement pay from this exemption. The change applies to income earned in tax years starting after the bill's enactment date.
HR 7550, the Permanent Tax Relief for Seniors Act, makes a specific tax deduction for seniors permanent. It removes an expiration date that previously limited the deduction to taxable years before 2029, extending it indefinitely. This change directly affects seniors aged 65 or older who claim the standard deduction under the Internal Revenue Code. The key mechanism is amending the tax code to eliminate the sunset provision, ensuring the deduction applies to all future taxable years beginning after December 31, 2026. The policy change provides ongoing tax relief for eligible seniors without altering other tax provisions.
This bill creates a tax exclusion for K-12 public school teachers, allowing them to exclude up to $50,000 of their wages from federal income tax. Teachers in schools where 75%+ students qualify for free/reduced lunches, in rural areas, or teaching special education/STEM subjects qualify for a higher exclusion of $65,000. To qualify, teachers must work at least 900 hours in a school year at a public elementary or secondary school (including charter schools). The exclusion applies to taxable years beginning after December 31, 2025, and requires schools to verify eligibility for the IRS. It directly affects eligible K-12 public school teachers by reducing their taxable income.
This bill excludes certain state-funded payments for disaster-resistant property improvements from taxable income. Homeowners who receive payments from state programs to make upgrades (like reinforcing roofs against windstorms or elevating homes to reduce flood damage) will not have those amounts counted as taxable income. The law specifically covers payments for "qualified catastrophe mitigation payments" made to reduce damage from windstorms, earthquakes, floods, or wildfires. It applies to payments received under state-established programs, including those managed by state insurance agencies or entities ensuring property insurance markets.
HR 2972, the EITC for Older Workers Act of 2025, removes the age limit preventing workers over 65 from claiming the Earned Income Tax Credit (EITC). It amends the tax code to eliminate the requirement that recipients must be "not attained age 65," directly affecting low-to-moderate income workers aged 65 and older who were previously ineligible. The change takes effect for tax years beginning after December 31, 2025, allowing these workers to access the credit for earned income. This is a direct policy change to expand eligibility under the existing EITC program.
This bill creates a new tax credit for employers who provide training to non-highly compensated employees that leads to recognized postsecondary credentials like industry certifications, licenses, or associate degrees. The credit equals 20% of qualified training expenses (after accounting for previous years' spending), with a special 10% rate for businesses with no prior training costs. Small businesses with under $5 million in annual revenue can elect to apply part of this credit against payroll taxes instead of income tax. Qualified training must be provided through approved channels like community colleges, apprenticeships, or industry partnerships, and must result in an industry-recognized credential. The bill requires the Department of Labor to define "recognized postsecondary credential" within one year of enactment.
This bill suspends federal income tax collection for most wage-earning citizens during any government shutdown (partial or full), meaning no taxes, penalties, or interest accrue on individual income tax payments or returns during that period. It specifically exempts backpay for furloughed federal employees or contractors (under the Government Employee Fair Treatment Act of 2019) from federal income taxation. The Treasury Department must issue guidelines to help employers comply with these tax suspensions for all covered workers, including tipped, hourly, and salaried employees. The law directly affects ordinary wage earners and furloughed federal workers during shutdowns, creating a temporary tax freeze.
