Tax Cuts for Working Families Act

To amend the Internal Revenue Code of 1986 to rename the standard deduction the guaranteed deduction, and to add a bonus amount to the guaranteed deduction for taxable years 2024 and 2025. 1. Short title This Act may be cited as the Tax Cuts for Working Families Act 2. Standard deduction renamed guaranteed deduction (a) In general Section 63 (1) by striking standard deduction guaranteed deduction (2) in subsection (c)— (A) in the heading, by striking Standard deduction Guaranteed deduction (B) in the heading of paragraph (2), by striking standard deduction guaranteed deduction (C) in the heading of paragraph (3), by striking standard deduction guaranteed deduction (D) in the heading of paragraph (5), by striking standard deduction guaranteed deduction (E) in the heading of paragraph (6), by striking standard deduction guaranteed deduction (F) in the heading of paragraph (7)(A), by striking standard deduction guaranteed deduction (b) Conforming amendments (1) Section 1(g)(4)(A) of such Code is amended by striking standard deduction guaranteed deduction (2) Section 56(b)(1)(D) of such Code is amended— (A) in the heading, by striking Standard deduction guaranteed deduction (B) by striking standard deduction guaranteed deduction (3) Section 861(b) of such Code is amended by striking standard deduction guaranteed deduction (4) Section 862(b) of such Code is amended by striking standard deduction guaranteed deduction (5) Section 1398(c) of such Code is amended— (A) in the heading, by striking standard deduction guaranteed deduction (B) in the heading of paragraph (3), by striking standard deduction guaranteed deduction (C) by striking standard deduction guaranteed deduction (6) Section 3402 of such Code is amended by striking standard deduction guaranteed deduction (7) Section 6012 of such Code is amended by striking standard deduction guaranteed deduction (8) Section 6013(b)(3)(A) of such Code is amended by striking standard deduction guaranteed deduction (9) Section 6014(b)(4) of such Code is amended by striking standard deduction guaranteed deduction (10) Section 6334 of such Code is amended by striking standard deduction guaranteed deduction (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 3. Bonus guaranteed deduction for 2024 and 2025 (a) In general Section 63(c) (8) Bonus guaranteed deduction for taxable years 2024 and 2025 (A) In general In the case of a taxable year beginning after December 31, 2023, and before January 1, 2026, the guaranteed deduction shall be increased by the amount of the bonus guaranteed deduction. (B) Bonus guaranteed deduction For purposes of this paragraph, the bonus guaranteed deduction is— (i) twice the dollar amount in effect under clause (iii) in the case of a joint return or a surviving spouse (as defined in section 2(a)), (ii) $3,000 in the case of a head of household, and (iii) $2,000 in any other case. (C) Adjustment for inflation In the case of a taxable year beginning after 2024, the dollar amounts in clauses (ii) and (iii) of subparagraph (B) shall each be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting 2023 2016 If any increase under this subparagraph is not a multiple of $50, such increase shall be rounded to the next lowest multiple of $50. (D) Limitation on bonus guaranteed deduction based on modified adjusted gross income (i) In general The bonus guaranteed deduction determined under subparagraph (B) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer's modified adjusted gross income as exceeds the threshold amount. For purposes of the preceding sentence, the term modified adjusted gross income (ii) Threshold amount For purposes of clause (i), the threshold amount is— (I) $400,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)), (II) $300,000 in the case of a head of household, and (III) $200,000 in any other case. (E) Bonus guaranteed deduction not allowed to dependents In the case of any individual with respect to whom paragraph (5) applies for any taxable year, subparagraph (A) shall not apply. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. June 30, 2023 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Summary: Tax Cuts for Working Families Act This bill renames the standard tax deduction as the guaranteed deduction. It allows an additional bonus amount of $2,000 ($4,000 for married couples filing jointly) in taxable years beginning in 2024 and 2025 but reduces the bonus amount for taxpayers whose modified adjusted gross income exceeds $200,000 ($400,000 for joint filers).