Congress quietly cuts taxes for bonus-eligible workers, leaving others behind
H.R. 6872 — Holiday Bonus Tax Relief Act of 2025 · Filed by Ryan Mackenzie (R-PA) · 1 cosponsor · Introduced Dec 18, 2025 · Referred to committee
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What it does
This bill allows employees to exclude up to $2,500 of holiday, end-of-year, or similar bonuses received in November, December, or January from federal income tax. The exclusion applies to bonuses received after November 1, 2025, and the $2,500 cap adjusts annually for inflation. Employers must report these bonuses on W-2 forms, and the IRS can issue regulations to prevent abuse.
Why we flagged it
The bill's core mechanism is a straightforward income-tax exclusion for a specific category of compensation (holiday bonuses). It is not deregulation, not a subsidy, and not a rider—it is a direct, narrowly scoped tax benefit for a defined group of workers.
What the text implies
- The exclusion may incentivize employers to reclassify regular wages or other compensation as 'holiday bonuses' to reduce employee tax liability, creating enforcement challenges for the IRS despite anti-abuse language.
- The benefit is regressive: it accrues primarily to salaried and professional workers in stable employment who receive bonuses, while excluding hourly workers, gig workers, and the self-employed—widening the tax-benefit gap by income class.
The full analysis lists 3 implications of this text.
Who stands to gain
employees receiving holiday bonuses; professional and salaried workers