Budget & Taxes

Restoring Establishment Deductions and Uplifting Competition to Ease Food Prices Act or the REDUCE Food Prices Act This bill establishes a new tax credit for certain food retail businesses. The bill also increases bonus depreciation, the qualified business income (QBI) tax deduction, the rehabilitation tax credit (also known as the historic preservation tax credit), and the work opportunity tax credit (WOTC) for the businesses. The bill establishes a new tax credit (as part of the general business tax credit) in the amount of 15% of certain capital investments by a qualified small food retail business in the first three years of operation. The bill defines a qualified small food retail business as a private or closely-held company, a partnership, or a sole proprietorship (1) with annual average gross receipts of $200 million or less for the three tax years preceding the current tax year, (2) with at least 70% of its annual average gross receipts attributable to the retail sale of food or produce, and (3) located in a low-competition area. The bill also increases bonus depreciation percentages for certain property placed into service by a qualified small food retail business, the QBI tax deduction for qualified small food retail business, the rehabilitation tax credit for qualified rehabilitation expenses incurred by a qualified small food retail business, and the WOTC for wages paid by a qualified small food retail business to eligible workers.

The Bonuses for Cost-Cutters Act of 2025 allows federal employees to receive cash awards of up to $20,000 for identifying spending their agency's Chief Financial Officer determines is not required for its intended purpose. Employees report potential wasteful expenses to their agency's Chief Financial Officer, who verifies if the spending qualifies under the new definition (funds not needed for their original purpose). If approved, the agency head can award the employee, and agencies must publicly report on these disclosures and awards. The Office of Personnel Management will monitor compliance, and the Comptroller General will report on the program's operation every three years.

This bill amends U.S. Code to allow military retirees with service-connected disabilities rated below 50% to receive both full retired pay and veterans’ disability compensation without pay reduction, regardless of their years of service. It specifically removes the previous requirement that disability retirees must have at least 20 years of service to qualify for concurrent receipt. The key provision adjusts the calculation method for reducing retired pay, ensuring those with fewer than 20 years of service can retain full retired pay when combined with disability compensation. This directly affects military retirees with service-connected disabilities under 50% disability rating who previously faced reduced retired pay. The bill takes effect after enactment, applying to payments for months beginning on or after the effective date.

The LASSO Act requires 10% of annual revenue generated from public lands managed by the Interior Department and Agriculture Department (including national forests and Outer Continental Shelf areas) to be deposited into the Social Security Trust Fund. This directly affects the Social Security Trust Fund by increasing its funding, while ensuring no fee hikes for public land activities or reductions in funds for states, tribes, or local governments. The bill mandates this transfer annually without altering existing revenue-sharing agreements or pricing structures. It aims to bolster Social Security finances through a specific, measurable mechanism tied to federal land management.

HR 1086, the Agriculture Export Promotion Act of 2025, increases funding for two key U.S. Department of Agriculture export programs to boost agricultural trade. It raises the Market Access Program budget from $255 million to $489.5 million annually and doubles the Foreign Market Development Cooperator Program base funding from $200 million to $400 million, with cooperator funding increasing from $34.5 million to $69 million. These changes, effective through 2029, address years of stagnant funding while aiming to counter competitive disadvantages from foreign agricultural export programs. The bill directly supports U.S. agricultural producers - from apple growers to seafood exporters - by expanding access to international markets through these programs.

Growing and Preserving Innovation in America Act of 2025 This bill makes permanent the increased percentage rates at which a domestic corporation may deduct (for federal tax purposes) foreign-derived intangible income and global intangible low-taxed income (GILTI). As background, for tax years beginning after 2017 and before 2026, a domestic corporation generally is allowed a tax deduction equal to the sum of (1) 37.5% of the corporation’s foreign-derived intangible income, and (2) 50% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI. However, under current law, the tax deduction decreases starting in 2026, to the sum of (1) 21.875% of the corporation’s foreign-derived intangible income, and (2) 37.5% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI. Under the bill, for tax years beginning in 2026, a domestic corporation generally may claim a tax deduction equal to the sum of (1) 37.5% of the corporation’s foreign-derived intangible income, and (2) 50% of the corporation’s GILTI and any dividends that are attributable to the corporation’s GILTI.

HR 869, the Keep Our PACT Act, mandates specific annual funding levels for two key education programs: Title I of the Elementary and Secondary Education Act (ESEA) and the Individuals with Disabilities Education Act (IDEA). For Title I, it requires funding in fiscal years 2026-2035 that equals the difference between the 2025 funding level and set annual dollar targets (e.g., $20.5 billion for 2026). For IDEA, it sets mandatory annual funding levels that gradually increase to reach 40% of the national average per-pupil expenditure for students with disabilities by 2035. The bill directly affects public school districts and students, particularly those with disabilities, by guaranteeing these funding levels rather than relying on annual appropriations.

The STAR Act of 2025 adds a 25% tax credit for qualified semiconductor design expenses incurred by U.S. companies. It directly affects businesses conducting semiconductor design in the United States, covering both in-house costs (like wages and supplies for U.S. design work) and contracted design services. The credit excludes duplicating existing products, cosmetic design, or activities unrelated to performance or reliability improvements. This incentive expires for design expenses paid after December 31, 2036.

This bill extends tax filing deadline relief from 60 to 120 days for taxpayers affected by natural disasters. It allows states (or the District of Columbia) to request IRS postponements for disasters like hurricanes, floods, or droughts, rather than requiring federal disaster declarations. The change applies to all taxpayers in affected areas across all 50 states, territories, and the District of Columbia. The law modifies IRS rules under Section 7508A of the Internal Revenue Code to implement these longer, state-declared disaster extensions.

The Primary Care Enhancement Act of 2025 changes how certain primary care arrangements are treated for tax purposes. It defines "direct primary care service arrangements" as fixed-fee models (max $150/month per person, excluding prescriptions/anesthesia/labs) that won’t count as "health plans" under tax law. This allows the fees to be treated as deductible medical expenses and requires employers to report them on W-2 forms. The law applies to taxable years starting after 2025, affecting patients in these arrangements, employers offering them, and tax filing processes.