This bill creates a new tax deduction for cash tips received by workers in specific service occupations that traditionally accepted tips before 2024 (like servers, barbers, and beauticians). It allows a deduction of up to $25,000 per year for qualified tips included on employer statements, but excludes employees who earned over a certain threshold ($220,000 in 2023) from the same employer the previous year. The deduction applies to taxable years beginning after December 2024 and is designed to reduce taxable income for eligible workers. It directly affects service industry workers in qualifying tip-dependent jobs who receive cash tips, not the general public.
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.
HR 354, the Small Business Growth Act, increases tax deduction limits for small businesses purchasing equipment. It raises the annual deduction cap from $1 million to $2 million and the phaseout threshold from $2.5 million to $3.5 million under Section 179 of the tax code. These changes directly affect small businesses that buy qualifying depreciable assets like machinery or vehicles, allowing them to deduct more of the cost upfront. The provisions apply to property placed in service after December 31, 2025, with inflation adjustments updated to reference 2025 and 2026.
HR 703, the Main Street Tax Certainty Act, makes a key tax deduction permanent for small business owners. It removes the temporary sunset provision (subsection (i)) from Section 199A of the tax code, ensuring the qualified business income deduction remains available for eligible small businesses. This change directly affects pass-through business owners (like S-corps, partnerships, and sole proprietorships) who currently qualify for this deduction. The permanent change takes effect for tax years starting after December 31, 2025.
The Agricultural Environmental Stewardship Act of 2025 extends the deadline for a tax credit for qualified biogas property from December 31, 2024, to December 31, 2025. This change applies to biogas property construction beginning after December 31, 2024, as amended in the Internal Revenue Code. The bill directly affects agricultural businesses and producers building biogas systems that convert organic waste into energy, enabling them to claim the tax credit for a longer period. The key mechanism is a straightforward extension of an existing credit, without altering eligibility or creating new requirements.
HR 1990, the American Innovation and R&D Competitiveness Act of 2025, amends tax rules for businesses to make research and development (R&D) costs more flexible. It allows companies to deduct R&D expenses immediately as business costs (instead of capitalizing them) or to spread these costs over a minimum 60-month period. The bill clarifies which R&D expenses qualify, excludes land improvements and mineral exploration costs, and ensures companies can claim R&D tax credits without conflict with expense treatment. This directly affects businesses that conduct R&D, changing how they account for these costs on tax returns starting for 2022 taxable years.
The ELITE Vehicles Act repeals federal tax credits for purchasing new electric vehicles, used clean vehicles, and commercial clean vehicles. It also eliminates the tax credit for installing electric vehicle charging infrastructure. These changes apply to vehicles purchased or with a binding contract entered into 30 days after the bill's enactment. The bill directly affects consumers and businesses that previously used these credits to offset the cost of electric vehicles and charging stations.
HR 1424 increases the employer tax credit for providing paid family and medical leave under the Internal Revenue Code. It doubles the credit percentages - from 12.5% to 25% for smaller employers and 25% to 50% for larger employers - and makes the credit permanent by removing its temporary sunset provision. This bill directly affects employers who offer paid leave benefits, reducing their tax burden for providing such coverage. The changes apply to taxable years beginning after December 31, 2025.
The American Innovation Act of 2025 modifies tax rules to support new businesses by changing how start-up and organizational costs can be deducted. It allows businesses to deduct up to $20,000 (adjusted for inflation) of initial costs in the first year, with remaining costs amortized over 15 years (180 months). The bill also preserves net operating losses and tax credits for new businesses after ownership changes, helping startups maintain tax benefits when sold or restructured. This primarily affects new businesses, startups, and small companies forming new ventures beginning after December 31, 2025.
This bill amends the tax code to change how small business owners calculate a deduction for pass-through business income. It caps the deduction at $25,000 annually for eligible small businesses (defined as those with qualified business income under $25,000), while raising the income threshold for phaseout to $200,000 ($400,000 for joint filers). The changes simplify rules around loss carryovers and wage calculations for this deduction. The bill takes effect for tax years beginning after December 31, 2025.
