Bill changes tax rules for S companies and their owners.

What it does

The bill makes several changes to how S companies work for taxes. It lets heirs get a tax break when they get S company stock. It raises the limit on investment money from 25 percent to 60 percent. It lets nonresident aliens, IRAs, and employee groups own S company stock. It removes a tax rule called Section 409A. It raises the number of owners from 100 to 250.

Who it affects

S company owners and high-paid workers gain tax breaks. Rich people and their heirs get help from the changes. Regular workers who do not own S companies do not gain.

One thing to notice

The bill gives big tax breaks to wealthy S company owners. It does not create new money or programs for other people.

From the analysis of the bill text, linked under Primary records below.

Where it stands

• Jul 22, 2026 — Introduced · Congress.gov: “Introduced in House”
• Jul 22, 2026 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Words to know

• S company — A type of business where profits pass through to owners' taxes instead of being taxed at the company level.
• Section 409A — A tax rule that makes high-paid workers pay taxes now on pay they agree to get later.
• nonresident aliens — People who are not U.S. citizens and do not live in the United States.
• IRAs — Retirement savings accounts where money grows without being taxed until the owner takes it out.