This bill permanently excludes forgiven mortgage debt on primary residences from taxable income under the Internal Revenue Code. It directly affects homeowners who have their mortgage debt forgiven (e.g., through short sales or foreclosure) by preventing them from owing income tax on the forgiven amount. The key change amends tax code Section 108(a)(1)(E) to remove the temporary expiration date, making the exclusion permanent. The provision applies to mortgage debt discharged after December 31, 2025. This simplifies tax treatment for affected homeowners without creating new government programs or benefits.
HR 778, the Safeguarding American Workers’ Benefits Act, modifies Social Security Number (SSN) requirements for claiming the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). It requires taxpayers to provide SSNs issued to U.S. citizens or under specific legal provisions (as defined in the bill) before the tax return deadline, replacing previous allowances for certain alternative numbers. This directly affects individuals filing taxes who seek these credits, as they must now use only eligible SSNs to qualify. The changes apply to taxable years beginning after December 31, 2025. The bill does not alter the credit amounts but tightens verification rules for eligibility.
HR 561, the Overtime Pay Tax Relief Act of 2025, allows eligible hourly workers to deduct up to 20% of their legally required overtime pay from their taxable income. This deduction applies to workers earning overtime under the Fair Labor Standards Act, with income limits: $100,000 for single filers, $150,000 for heads of household, and $200,000 for married couples filing jointly. The deduction expires after 2029 and applies to all taxpayers, including those who don’t itemize deductions. It modifies tax withholding procedures to implement this new deduction starting from the bill’s enactment date.
The Carried Interest Fairness Act of 2025 would change how certain investment management compensation is taxed by reclassifying net capital gains from "investment services partnership interests" as ordinary income rather than capital gains. This would affect private equity and hedge fund managers who receive carried interest as compensation, changing their tax treatment from capital gains rates to ordinary income rates. The bill creates specific rules that treat net capital gains as ordinary income while limiting capital losses to the amount of previously taxed ordinary income. It also requires that gains from dispositions of these interests be treated as ordinary income, and establishes special rules for qualified capital interests within these partnerships. The legislation would apply to partnerships where individuals provide investment management services related to the partnership's assets.
HR 609, the Assuring Medicare's Promise Act of 2025, directs revenue from the net investment income tax (currently applied to investment income) into the Medicare Hospital Insurance Trust Fund. It expands the tax base to include certain business income for high-income individuals with modified adjusted gross income exceeding $400,000 ($500,000 for joint filers), with a phase-in to limit the tax increase. The bill ensures this tax revenue directly supports Medicare's hospital insurance program, applying to taxable years beginning after December 31, 2025. The changes do not alter the tax rate but broaden the income types subject to the tax for high earners.
This bill allows qualifying workers to exclude income from a secondary job from their taxable income and payroll taxes. To qualify, workers must designate a primary employer (based on hourly work ≥2,080 hours) and earn secondary income below phase-out thresholds ($100,000 individual/$150,000 married joint filers). The exclusion phases out for income above these thresholds and expires after five years. It directly affects workers with a second job who meet the primary employer requirement, changing how secondary job earnings are taxed under the Internal Revenue Code.
This bill provides tax relief to individuals affected by Hurricanes Helene and Milton in designated disaster areas. It allows affected taxpayers to use their previous year's income to calculate their Earned Income Credit if their current year income is lower, and increases limits on charitable contributions made for hurricane relief efforts, with some contributions treated as made in 2024. The bill also establishes special rules for accessing retirement funds without penalties, including the ability to repay withdrawals within 3 years. These provisions apply to individuals whose principal residence was in a declared disaster area during the incident period (September 28, 2024 - November 2, 2024).
The Disaster Resiliency and Coverage Act of 2025 creates a federal program that provides grants to states and tribal governments to help homeowners in high-risk disaster areas make their homes more resilient. The program covers specific mitigation activities like reinforcing roofs, installing flood barriers, and creating fire-resistant features, with a $10,000 per household limit. Homeowners must have an adjusted gross income under $250,000 ($500,000 for joint returns) to qualify. The bill also includes tax benefits, allowing these grant amounts to be excluded from gross income and providing a 30% tax credit for qualifying mitigation expenditures.
HR 314, the Empowering Nonprofits Act, reduces the cost-sharing requirement for certain nonprofit organizations receiving federal grants. Specifically, it lowers the nonprofit's share of grant costs by 25% for five years after enactment for organizations located in states where over 20% of people live below the federal poverty line. This applies only to 501(c)(3) nonprofits that are exempt from federal income tax. The bill directly affects eligible nonprofits in high-poverty states by making federal grants more accessible with lower upfront financial obligations. It modifies existing grant rules without creating new programs or changing eligibility for other organizations.
The EITC Modernization Act expands the Earned Income Tax Credit to include more types of dependents (not just "qualifying children" but also "qualifying dependents" including aged dependents and students) and creates a new category for qualifying students who receive Federal Pell Grants or have modified adjusted gross income below 250% of the poverty line. It establishes a minimum $1,200 credit for qualifying students and individuals with certain dependents, allows recipients to receive their credit in monthly payments instead of a single annual payment, and creates new return preparation assistance programs for low-income taxpayers through the IRS. The bill also adjusts eligibility to include individuals as young as 18 without dependents (previously age 25) and adds special provisions for new parents with children born or adopted during the year. These changes aim to increase access to the credit for more working individuals and families while improving the administration of the program.
