Holiday Bonus Tax Relief Act of 2025

Sponsor: Ryan Mackenzie (Republican-PA)December 18, 2025

AI-generated ?

Report an error

Introduced

In Committee

Passed One Chamber

Passed Both Chambers

Signed into Law

Referred to the House Committee on Ways and Means.

Lets workers keep more of their holiday bonus money by making it tax-free.

This bill would let many workers keep more of their holiday bonus money because it would no longer be taxed. It would make up to $2,500 of holiday, end-of-year, or similar bonuses tax-free each year. This change would apply to bonuses received in November, December, or January.

What Would Change

Currently, any holiday bonus an employee receives is counted as taxable income. If this bill becomes law, employees would not have to pay federal income tax on the first $2,500 of their holiday, end-of-year, or similar bonuses received in November, December, or January.

Key Provisions

Lets individuals exclude up to $2,500 in qualified holiday bonuses from their taxable income each year.
Adjusts the $2,500 tax-free limit for inflation starting in 2027.
Defines a "qualified holiday bonus" as an end-of-year or similar bonus paid in November, December, or January.
Requires employers to report the total amount of these tax-free holiday bonuses on employee W-2 forms.
Gives the Treasury Secretary the power to create rules to prevent people from misusing this tax exclusion.

View on Congress.gov

HR 6872 · 119th Congress · December 18, 2025 · AI Summary by gemini-2.5-flash · 9/10

Holiday Bonus Tax Relief Act of 2025

What Would Change

Key Provisions

Lobbying Activity