Congress blocks tax breaks for U.S. companies earning money in Russia
H.R. 9764 — HONOR Act · Filed by Brad Schneider (D-IL) · 1 cosponsor · Introduced Jul 16, 2026 · Referred to committee
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What it does
This bill blocks U.S. companies and individuals from claiming foreign tax credits for taxes paid to Russia. The ban lasts from 30 days after enactment until normal trade relations with Russia are restored under existing law. It overrides any U.S. treaty obligations that might otherwise allow such credits.
Why we flagged it
The bill's sole operative mechanism is a targeted tax penalty on U.S. taxpayers earning income in Russia, functioning as a financial sanction to reduce capital flows to Russia during an active conflict. It is a straightforward foreign-policy tool, not a tax-code amendment for revenue or structural reasons.
What the text implies
- The bill's termination date is pegged to restoration of normal trade relations with Russia under the Suspending Normal Trade Relations with Russia and Belarus Act — meaning the tax penalty automatically expires if Congress votes to normalize trade, creating a built-in sunset tied to geopolitical conditions rather than a fixed date.
- By denying the foreign tax credit (not by imposing a new tax), the bill increases effective U.S. tax rates on Russian-source income without formally raising rates, potentially affecting investment decisions and capital allocation in ways less visible than a direct tariff or sanction.
The full analysis lists 3 implications of this text.
Who stands to gain
U.S. Treasury (increased tax revenue from denied credits)