Taxation Desk
Taxation Bills
12 bills in the Taxation desk, ordered for current relevance and readability.
TaxationHR-33-119Latest action: Jan 16, 20252 readersPassed Chamber
To amend the Internal Revenue Code of 1986 to provide special rules for the taxation of certain residents of Taiwan with income from sources within the United States.
Sponsored by Jason Smith
Under current U.S. tax law, residents of Taiwan who earn income from U.S. sources face the same withholding and tax rates as other foreign nationals. The Internal Revenue Code generally imposes a 30 percent withholding tax on interest, dividends, and royalties paid to foreign persons, and taxes foreign corporations on U.S.-source business income at regular corporate rates. Taiwan residents working in the United States or earning investment income are subject to these standard rules, which can result in double taxation if Taiwan also taxes the same income. This bill amends the Internal Revenue Code by inserting a new section 894A that establishes preferential tax treatment for qualified residents of Taiwan. The Department of the Treasury will apply reduced withholding rates—10 percent on most investment income (interest, dividends, royalties) and 15 percent on certain dividends—rather than the standard 30 percent. The bill also exempts qualified wages earned by Taiwan residents who are not U.S. residents from withholding entirely, and excludes entertainment or athletic income under $30,000 from taxation. For Taiwan residents operating a U.S. business through a permanent establishment, the bill allows taxation under regular U.S. corporate rates rather than the higher rates normally applied to foreign corporations, and reduces the branch profits tax from 30 percent to 10 percent. Implementation occurs upon enactment, with the Treasury Department authorized to issue regulations clarifying definitions and procedures. The bill creates eligibility requirements: individuals must be taxed as residents of Taiwan and not be U.S. persons; corporations must meet ownership tests (at least 50 percent Taiwan-owned), be publicly traded in Taiwan, or qualify as subsidiaries of qualifying entities. The reduced rates apply only to income not effectively connected with a U.S. permanent establishment, except where specified. Revenue effects depend on the volume of Taiwan-source investment and business activity in the United States, and the provision operates as a bilateral tax preference without requiring reciprocal action by Taiwan.
Taxation
Latest updateJan 15, 2025
Passed/agreed to in House: On passage Passed by the Yeas and Nays: 423 - 1 (Roll no. 15). (text: CR H160-164)
Taxation
TaxationHR-173-119Latest action: Jan 3, 202514 readersIn Committee
High Rise Fire Sprinkler Incentive Act of 2025
Sponsored by Nicole Malliotakis
Under current tax law, building owners who install fire sprinkler systems must depreciate those systems over their useful life, typically 39 years for residential properties. This lengthy depreciation period means owners recover the cost of their investment slowly, reducing the immediate tax incentive to retrofit older buildings with modern fire safety equipment. High-rise residential buildings constructed before modern fire codes often lack automatic sprinkler systems, and the upfront capital cost combined with slow tax recovery discourages owners from making these safety upgrades. The High Rise Fire Sprinkler Incentive Act of 2025 amends the Internal Revenue Code to reclassify automatic fire sprinkler system retrofits as 15-year property for depreciation purposes. The Internal Revenue Service will treat qualifying sprinkler installations—those meeting National Fire Protection Association standards and installed in residential buildings taller than 75 feet that were built before the retrofit—as depreciable over 15 years rather than 39 years. This accelerated depreciation schedule allows building owners to deduct the cost of retrofits more quickly, generating larger tax deductions in earlier years and improving the financial return on safety investments. The change takes effect immediately upon enactment and requires no new federal funding or agency action beyond IRS implementation of the revised depreciation classification. Building owners undertaking sprinkler retrofits will begin claiming accelerated deductions on their tax returns in the year the system is placed in service. The faster cost recovery should increase the economic attractiveness of retrofitting older high-rise residential buildings, potentially spurring more widespread installation of fire suppression systems in buildings that currently lack them and reducing fire risk in aging urban housing stock.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-111-119Latest action: Jan 3, 202511 readersIn Committee
To amend the Internal Revenue Code of 1986 to allow an above-the-line deduction for health insurance premiums.
Sponsored by Andy Biggs
Currently, the Internal Revenue Code allows individuals to deduct health insurance premiums only in limited circumstances. Self-employed workers can deduct premiums for themselves and their families, and certain other taxpayers can deduct medical expenses if they exceed 7.5 percent of adjusted gross income. However, most employed individuals cannot deduct health insurance premiums at all, even though employers can deduct the cost of providing health coverage to workers. This asymmetry means that the tax code effectively subsidizes employer-sponsored insurance while offering no tax benefit to individuals who purchase coverage independently or through other means. This bill amends the Internal Revenue Code to allow all individuals to claim an above-the-line deduction for health insurance premiums paid for themselves, their spouses, and their dependents. The deduction would be available under new Section 224 of the tax code and would be claimed on the front of the tax return, meaning taxpayers can claim it regardless of whether they itemize other deductions. The bill specifies that premiums must constitute medical care as defined in existing tax law, and that the deduction cannot be claimed twice or used to reduce other deductions or credits the taxpayer might otherwise claim. The change takes effect for tax years beginning after December 31, 2024, meaning it would first apply to returns filed in 2025 for the 2024 tax year. The deduction would reduce federal tax revenue by allowing individuals to exclude premium payments from taxable income. The provision operates independently of existing health insurance arrangements and does not modify employer-sponsored coverage rules, the Affordable Care Act, or other health programs. Individuals would claim the deduction on their annual tax returns, and the Internal Revenue Service would administer the provision through standard tax compliance procedures.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-138-119Latest action: Jan 3, 20253 readersIn Committee
Lowering Costs for Caregivers Act of 2025
Sponsored by Vern Buchanan
Currently, the Internal Revenue Code allows individuals to set aside pre-tax income for medical expenses through Health Savings Accounts (HSAs), Flexible Spending Arrangements (FSAs), Health Reimbursement Arrangements (HRAs), and Archer Medical Savings Accounts (Archer MSAs). However, these accounts restrict eligible medical expenses to those incurred by the account holder, their spouse, and their dependents. Parents of the account holder or spouse are generally excluded, even when adult children provide financial support for a parent's healthcare costs. This creates a tax burden for working adults who shoulder caregiving responsibilities for aging parents alongside their own family obligations. The Lowering Costs for Caregivers Act amends the Internal Revenue Code to expand the definition of eligible beneficiaries under HSAs, FSAs, HRAs, and Archer MSAs to include parents of either the account holder or their spouse. The Department of the Treasury will implement these changes by revising guidance on what qualifies as a covered dependent for purposes of these tax-advantaged accounts. The amendment removes the restriction that previously limited coverage to spouses and tax-dependent children, allowing caregivers to use pre-tax dollars to pay for a parent's medical expenses regardless of whether that parent qualifies as a tax dependent. The changes take effect for amounts paid or expenses incurred after December 31, 2024. No new funding is required, as the bill operates within existing account structures. The effect is to reduce the taxable income of workers who contribute to these accounts and pay for parental healthcare, lowering their overall tax liability. This expands the pool of eligible medical expenses without creating new programs or requiring appropriations, though it will reduce federal tax revenue by allowing more healthcare costs to be paid with pre-tax dollars.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-169-119Latest action: Jan 3, 20253 readersIn Committee
Prevent Family Fire Act of 2025
Sponsored by Mike Levin
Currently, the Internal Revenue Code does not provide tax incentives for the purchase or sale of firearm storage devices. While some states and localities have enacted their own storage requirements or incentive programs, there is no federal tax mechanism to encourage the adoption of safe storage practices. Accidental firearm injuries, particularly those involving children or unauthorized users, remain a public health concern, and storage devices—including gun safes, lockboxes, and biometric locks—are recognized as effective harm-reduction tools. The absence of a federal tax credit has meant that the cost of these devices falls entirely on individual purchasers, potentially limiting adoption rates. The Prevent Family Fire Act of 2025 amends the Internal Revenue Code to establish a new tax credit for retailers and manufacturers who sell safe firearm storage devices. The Department of the Treasury will administer the credit, which allows sellers to claim a credit equal to 10 percent of the retail sale price of each qualifying storage device, capped at $400 per device. A qualifying device must be designed to deny unauthorized access to firearms or ammunition through a combination lock, key lock, or biometric lock integrated into the device's design. The credit applies only to the first retail sale of each device and excludes devices that are part of a firearm's design or that have been subject to a mandatory Consumer Product Safety Commission recall. The credit takes effect for taxable years beginning after enactment and expires on December 31, 2032. The Department of the Treasury must publish annual reports showing credits claimed by state. Retailers and manufacturers can claim the credit against their federal income tax liability, including against the alternative minimum tax. The mechanism operates as a supply-side incentive: by reducing the after-tax cost of selling storage devices, the credit aims to lower retail prices or increase seller margins, potentially expanding market availability and affordability. The credit does not directly subsidize consumer purchases but instead incentivizes retailers to stock and promote these products.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-73-119Latest action: Jan 3, 20252 readersIn Committee
Abortion Is Not Health Care Act of 2025
Sponsored by Andy Biggs
Under current federal tax law, individuals can deduct qualified medical expenses that exceed 7.5 percent of their adjusted gross income from their taxable income. This deduction, established in Section 213 of the Internal Revenue Code, covers a broad range of healthcare costs including doctor visits, hospital stays, prescription medications, and other treatments deemed medically necessary. Abortion services, like other medical procedures, have historically been eligible for inclusion in this deduction when they meet the threshold requirements, allowing taxpayers to reduce their tax liability by the amount spent on abortion care. This bill amends Section 213 of the Internal Revenue Code to explicitly exclude abortion expenses from the medical expense deduction. The Department of the Treasury would be responsible for implementing this change through updated tax guidance and forms. The amendment adds a new subsection stating that amounts paid for an abortion during a taxable year cannot be counted toward the medical expense deduction, regardless of whether the abortion meets other criteria for medical deductibility. This creates a categorical exclusion that applies uniformly across all taxpayers and all circumstances. The change takes effect for taxable years beginning after the bill's enactment, meaning it would first apply to tax returns filed in 2026 for the 2025 tax year. No new funding is required, as the Internal Revenue Service would implement the restriction through existing administrative processes. The effect would reduce the tax deduction available to individuals who pay for abortion services out of pocket, increasing their taxable income in those years. This change operates independently of existing health insurance coverage rules and does not affect employer-sponsored health plans or other healthcare financing mechanisms.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-74-119Latest action: Jan 3, 20252 readersIn Committee
Freedom for Families Act
Sponsored by Andy Biggs
Currently, health savings accounts (HSAs) are tax-advantaged savings vehicles available only to individuals enrolled in high-deductible health plans. These accounts allow workers to set aside pre-tax income for qualified medical expenses, and unused balances roll over year to year. However, withdrawals for any non-medical purpose trigger income tax and a 20 percent penalty. Additionally, HSA contribution limits are tied to the specific health plan an individual holds, varying based on whether coverage is self-only or family. This structure creates inflexibility for workers facing caregiving responsibilities who need to take leave. The Freedom for Families Act amends the Internal Revenue Code to allow tax-free HSA withdrawals during periods of qualified caregiving leave. The bill directs the Treasury Department to treat distributions from HSAs as non-taxable income when an account holder takes leave under circumstances covered by the Family and Medical Leave Act of 1993—including caring for a spouse, child, or parent with a serious health condition, or bonding with a newborn. The legislation also eliminates the requirement that HSA holders maintain high-deductible health plan coverage, and establishes a flat annual contribution limit of $9,000 for individual coverage and $18,000 for joint returns, replacing the current variable limits tied to specific plan types. These changes take effect for taxable years beginning after enactment. The bill creates no new federal spending; it operates through the tax code by allowing HSA funds to be accessed without penalty during family leave. The removal of the high-deductible plan requirement expands HSA eligibility to workers in other insurance arrangements, potentially increasing overall HSA participation. The fixed contribution limits simplify administration but may reduce contributions for some workers previously covered under higher limits. The caregiving provision effectively converts HSAs into dual-purpose accounts that function both for medical expenses and income replacement during unpaid leave.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-25-119Latest action: Jan 3, 20252 readersIn Committee
FairTax Act of 2025
Sponsored by Earl Carter
Currently, the federal government raises revenue through income taxes on individuals and businesses, payroll taxes for Social Security and Medicare, and estate and gift taxes on wealth transfers. The Internal Revenue Service administers these taxes through a complex system of filing requirements, withholding, and enforcement. This system has existed since the 16th Amendment authorized federal income taxation in 1913, and payroll taxes were added in 1935 with Social Security's creation. The bill responds to longstanding criticism that this multi-layered tax system imposes high compliance costs, discourages savings and investment, and creates privacy concerns through extensive IRS record-keeping and auditing. The FairTax Act repeals Subtitle A (income and self-employment taxes), Subtitle B (estate and gift taxes), and Subtitle C (payroll taxes) of the Internal Revenue Code, effective January 1, 2027. In their place, Congress enacts a new national sales tax administered primarily by state governments. The tax applies to all consumption of goods and services purchased for final use, with rates and collection mechanisms defined in the bill's new Subtitle A. The Department of the Treasury retains oversight authority, but states designated as "administering states" collect and enforce the tax using their existing sales tax infrastructure. The bill establishes a "Family Consumption Allowance" providing rebates to households and directs states to coordinate collection efforts to prevent double taxation. Implementation begins January 1, 2027, with a two-year phase-out of IRS administration of repealed taxes. States receive compensation for collection and enforcement costs. Social Security and Medicare funding shifts from dedicated payroll taxes to general revenue, with the sales tax revenue designated to support these programs. The bill includes a sunset provision: if the 16th Amendment is not repealed by a specified date, the sales tax automatically terminates. Existing state sales taxes would continue operating alongside the federal sales tax, creating a dual system. The change fundamentally restructures federal revenue collection from income-based to consumption-based taxation, shifting administrative responsibility from the IRS to state tax agencies.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-196-119Latest action: Jan 3, 20252 readersIn Committee
Family and Small Business Taxpayer Protection Act
Sponsored by Adrian Smith
The Inflation Reduction Act of 2022 provided the Internal Revenue Service with approximately $80 billion in new funding over ten years to enhance tax enforcement, modernize aging computer systems, and expand customer service operations. This funding was appropriated through multiple budget categories covering enforcement activities, information technology infrastructure, customer service improvements, and administrative expenses. The IRS has not yet fully obligated all of these funds, leaving unspent balances available in the agency's accounts as of early 2025. This bill directs the rescission—or cancellation—of all unobligated balances from the specific funding categories provided by the Inflation Reduction Act. The action eliminates any remaining funds that the IRS has not yet committed to specific projects or operations under those appropriations. By rescinding these balances, the bill prevents the IRS from accessing this money for any future use, effectively reducing the agency's available budget authority regardless of how much of the original $80 billion has already been spent on ongoing programs. The rescission takes effect upon enactment, immediately freezing access to any unspent Inflation Reduction Act funds. The cancelled balances revert to the U.S. Treasury, reducing the federal deficit by the amount rescinded. This action does not affect IRS funding from other sources or appropriations made before the Inflation Reduction Act. However, it constrains the agency's ability to complete planned enforcement hiring, technology upgrades, and service improvements that were designed to operate over the full ten-year period, potentially extending timelines for those initiatives or requiring reallocation from other budget categories.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-140-119Latest action: Jan 3, 20252 readersIn Committee
Hurricane Helene and Milton Tax Relief Act of 2025
Sponsored by Vern Buchanan
Under current tax law, individuals and corporations face standard limitations on charitable deductions and earned income tax credits. The earned income tax credit (EITC), which provides refundable credits to low- and moderate-income workers, is calculated based on income earned in the current tax year. Similarly, charitable contributions are subject to percentage-of-income caps that limit how much donors can deduct annually, with unused deductions carried forward. These rules apply uniformly regardless of whether a taxpayer has experienced a sudden economic loss from a disaster. The Hurricane Helene and Milton Tax Relief Act of 2025 modifies the Internal Revenue Code to provide temporary relief for eligible individuals and businesses in federally declared disaster areas. The bill authorizes the Internal Revenue Service to allow affected taxpayers to calculate their earned income tax credit using income from the prior tax year if current-year earnings declined due to hurricane damage. For charitable contributions designated for hurricane relief, the bill requires the IRS to increase deduction limits for individuals to their full contribution base and for corporations to 20 percent of taxable income, with unused deductions carried forward five years. Additionally, the bill permits taxpayers to treat donations made between January 1 and April 15, 2025, as if made in 2024, allowing them to claim deductions on their 2024 returns. These changes take effect immediately for the 2024 and 2025 tax years, with no new appropriations required—the relief operates through existing tax administration mechanisms. Eligible individuals are those with a principal residence in a qualified hurricane disaster area who sustained economic loss between September 28 and November 2, 2024. The expanded charitable deduction limits apply through December 31, 2025, and any unused deductions carry forward for five subsequent years. The changes are limited to single-year elections for the EITC and do not affect how gross income is calculated for other tax purposes, ensuring the relief targets only those directly impacted by the hurricanes.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-110-119Latest action: Jan 3, 20251 readersIn Committee
Small Business Prosperity Act of 2025
Sponsored by Andy Biggs
Under current law, the Internal Revenue Code allows business owners to deduct up to 20 percent of their qualified business income from their taxable income, a provision known as the Section 199A deduction. This deduction was set to expire after 2025 but has been a significant tax benefit for self-employed individuals, partnerships, S corporations, and other pass-through entities. However, the deduction is subject to several limitations: it phases out for high-income earners, it is reduced based on W-2 wages paid to employees, and certain service businesses—such as consulting, financial services, and health care—are excluded from the benefit entirely. The Small Business Prosperity Act of 2025 makes four major changes to the tax code. First, it makes the Section 199A deduction permanent by removing its expiration date. Second, it expands the deduction from 20 percent to 43 percent of qualified business income (rising to 47 percent for tax years after 2025), effectively lowering the top tax rate on business income to 21 percent. Third, it eliminates the W-2 wage limitation and removes the exclusion for specified service businesses, allowing all business owners—including consultants, accountants, and health care providers—to claim the full deduction. Fourth, it allows partnerships and S corporations to apply the deduction at the partner or shareholder level rather than at the entity level. These changes take effect for tax years beginning after December 31, 2024, and require no new appropriations since they operate through the existing tax code. The expanded deduction will reduce federal tax revenue, as more business owners will owe lower taxes on their income. The bill also includes provisions treating organizational restructurings as non-taxable events and repeals the federal estate tax entirely while preserving the step-up in basis for inherited assets—changes effective for estates of decedents dying after December 31, 2024. These modifications will primarily benefit business owners with higher incomes and those who inherit substantial assets.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation
TaxationHR-137-119Latest action: Jan 3, 20250 readersIn Committee
TCJA Permanency Act
Sponsored by Vern Buchanan
Under current law, the Tax Cuts and Jobs Act of 2017 temporarily reduced individual income tax rates, expanded the standard deduction, created a deduction for qualified business income from pass-through entities, increased the child tax credit, and raised the estate and gift tax exemption. These provisions were set to expire after December 31, 2025, reverting to higher tax rates and lower deductions that existed before 2017. Without action, millions of taxpayers would face higher tax bills and reduced tax benefits for families, small business owners, and investors starting in 2026. The TCJA Permanency Act amends the Internal Revenue Code to make permanent the individual tax provisions that were scheduled to expire. The bill requires the Treasury Department to apply the 2017 tax rate brackets indefinitely across all filing statuses—married filing jointly, heads of household, single filers, and married filing separately—rather than allowing them to revert to pre-2017 levels. It also makes permanent the increased standard deduction amounts ($18,000 for married couples, $12,000 for single filers), the qualified business income deduction for pass-through entities, the enhanced child tax credit, and the higher estate and gift tax exemption. The bill removes sunset dates and expiration provisions that would otherwise trigger automatic tax increases. The changes take effect for taxable years beginning after enactment, meaning the 2026 tax year and beyond. No new appropriations are required; the bill operates within existing Internal Revenue Code mechanisms. The permanence of lower rates and expanded deductions will reduce federal tax revenue compared to allowing the provisions to expire, affecting the federal budget baseline. Taxpayers filing returns in 2026 and later will see their tax liability calculated under the permanent rates and deductions established by this bill rather than the higher pre-2017 rates. Pass-through business owners will continue claiming the qualified business income deduction without interruption, and families will maintain the expanded child tax credit and standard deduction amounts indefinitely.
Taxation
Latest updateJan 3, 2025
Referred to the House Committee on Ways and Means.
Taxation