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† HR 1 EAS 
a total quantity that is not less than 250,000,000 
board-feet greater than the quantity of board-feet 
sold in the previous fiscal year. 
(B) LIMITATION.—The timber sales under 
subparagraph (A) shall be subject to the max-
imum allowable sale quantity of timber or the 
projected timber sale quantity under the applica-
ble forest plan in effect on the date of enactment 
of this Act. 
(3) LONG-TERM CONTRACTING FOR THE FOREST 
SERVICE.— 
(A) LONG-TERM CONTRACTING.—For the pe-
riod of fiscal years 2025 through 2034, the Sec-
retary shall enter into not fewer than 40 long- 
term timber sale contracts with private persons 
or other public or private entities under sub-
section (a) of section 14 of the National Forest 
Management Act of 1976 (16 U.S.C. 472a) for 
the sale of national forest materials (as defined 
in subsection (e)(1) of that section) in the Na-
tional Forest System. 
(B) CONTRACT LENGTH.—The period of a 
timber sale contract entered into to meet the re-
quirement under subparagraph (A) shall be not
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† HR 1 EAS 
less than 20 years, with options for extensions or 
renewals, as determined by the Secretary. 
(C) RECEIPTS.—Any monies derived from a 
timber sale contract entered into to meet the re-
quirements under subparagraphs (A) and (B) 
shall be deposited in the general fund of the 
Treasury. 
(b) BUREAU OF LAND MANAGEMENT.— 
(1) DEFINITIONS.—In this subsection: 
(A) PUBLIC
LANDS.—The term ‘‘public 
lands’’ has the meaning given the term in section 
103 of the Federal Land Policy and Management 
Act of 1976 (43 U.S.C. 1702). 
(B) RESOURCE
MANAGEMENT
PLAN.—The 
term ‘‘resource management plan’’ means a land 
use plan prepared for public lands under section 
202 of the Federal Land Policy and Management 
Act of 1976 (43 U.S.C. 1712). 
(C) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of the Interior, acting 
through the Director of the Bureau of Land 
Management. 
(2) TIMBER SALES ON PUBLIC LANDS.— 
(A) IN GENERAL.—For each of fiscal years 
2026 through 2034, the Secretary shall sell tim-
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† HR 1 EAS 
ber annually on public lands in a total quantity 
that is not less than 20,000,000 board-feet great-
er than the quantity of board-feet sold in the pre-
vious fiscal year. 
(B) LIMITATION.—The timber sales under 
subparagraph (A) shall be subject to the applica-
ble resource management plan in effect on the 
date of enactment of this Act. 
(3) LONG-TERM CONTRACTING FOR THE BUREAU 
OF LAND MANAGEMENT.— 
(A) LONG-TERM CONTRACTING.—For the pe-
riod of fiscal years 2025 through 2034, the Sec-
retary shall enter into not fewer than 5 long- 
term contracts with private persons or other pub-
lic or private entities under section 1 of the Act 
of July 31, 1947 (commonly known as the ‘‘Ma-
terials Act of 1947’’) (61 Stat. 681, chapter 406; 
30 U.S.C. 601), for the disposal of vegetative ma-
terials described in that section on public lands. 
(B) CONTRACT LENGTH.—The period of a 
contract entered into to meet the requirement 
under subparagraph (A) shall be not less than 20 
years, with options for extensions or renewals, as 
determined by the Secretary.
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† HR 1 EAS 
(C) RECEIPTS.—Any monies derived from a 
contract entered into to meet the requirements 
under subparagraphs (A) and (B) shall be depos-
ited in the general fund of the Treasury. 
SEC. 50302. RENEWABLE ENERGY FEES ON FEDERAL LAND. 
(a) DEFINITIONS.—In this section: 
(1) ANNUAL
ADJUSTMENT
FACTOR.—The term 
‘‘Annual Adjustment Factor’’ means 3 percent. 
(2) ENCUMBRANCE FACTOR.—The term ‘‘Encum-
brance Factor’’ means— 
(A) 100 percent for a solar energy genera-
tion facility; and 
(B) an amount determined by the Sec-
retary, but not less than 10 percent for a wind 
energy generation facility. 
(3) NATIONAL FOREST SYSTEM.— 
(A) IN GENERAL.—The term ‘‘National For-
est System’’ means land of the National Forest 
System (as defined in section 11(a) of the Forest 
and Rangeland Renewable Resources Planning 
Act of 1974 (16 U.S.C. 1609(a))) administered 
by the Secretary of Agriculture. 
(B) EXCLUSION.—The term ‘‘National For-
est System’’ does not include any forest reserve 
not created from the public domain.
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† HR 1 EAS 
(4) PER-ACRE
RATE.—The term ‘‘Per-Acre 
Rate’’, with respect to a right-of-way, means the aver-
age of the per-acre pastureland rental rates published 
in the Cash Rents Survey by the National Agricul-
tural Statistics Service for the State in which the 
right-of-way is located over the 5 calendar-year pe-
riod preceding the issuance or renewal of the right-of- 
way. 
(5) PROJECT.—The term ‘‘project’’ means a sys-
tem described in section 2801.9(a)(4) of title 43, Code 
of Federal Regulations (as in effect on the date of en-
actment of this Act). 
(6) PUBLIC
LAND.—The term ‘‘public land’’ 
means— 
(A) public lands (as defined in section 103 
of the Federal Land Policy and Management Act 
of 1976 (43 U.S.C. 1702)); and 
(B) National Forest System land. 
(7) RENEWABLE ENERGY PROJECT.—The term 
‘‘renewable energy project’’ means a project located on 
public land that uses wind or solar energy to generate 
energy. 
(8) RIGHT-OF-WAY.—The term ‘‘right-of-way’’ 
has the meaning given the term in section 103 of the
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† HR 1 EAS 
Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1702). 
(9) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means— 
(A) the Secretary of the Interior, with re-
spect to land controlled or administered by the 
Secretary of the Interior; and 
(B) the Secretary of Agriculture, with re-
spect to National Forest System land. 
(b) ACREAGE RENT FOR WIND AND SOLAR RIGHTS- 
OF-WAY.— 
(1) IN GENERAL.—Pursuant to section 504(g) of 
the Federal Land Policy and Management Act of 
1976 (43 U.S.C. 1764(g)), the Secretary shall, subject 
to paragraph (3) and not later than January 1 of 
each calendar year, collect from the holder of a right- 
of-way for a renewable energy project an acreage rent 
in an amount determined by the equation described 
in paragraph (2). 
(2) CALCULATION OF ACREAGE RENT RATE.— 
(A) EQUATION.—The amount of an acreage 
rent collected under paragraph (1) shall be deter-
mined using the following equation: Acreage rent 
= A × B × ((1 + C)D)).
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† HR 1 EAS 
(B) DEFINITIONS.—For purposes of the 
equation described in subparagraph (A): 
(i) The letter ‘‘A’’ means the Per-Acre 
Rate. 
(ii) The letter ‘‘B’’ means the Encum-
brance Factor. 
(iii) The letter ‘‘C’’ means the Annual 
Adjustment Factor. 
(iv) The letter ‘‘D’’ means the year in 
the term of the right-of-way. 
(3) PAYMENT UNTIL PRODUCTION.—The holder of 
a right-of-way for a renewable energy project shall 
pay an acreage rent collected under paragraph (1) 
until the date on which energy generation begins. 
(c) CAPACITY FEES.— 
(1) IN GENERAL.—The Secretary shall, subject to 
paragraph (3), annually collect a capacity fee from 
the holder of a right-of-way for a renewable energy 
project based on the amount described in paragraph 
(2). 
(2) 
CALCULATION
OF
CAPACITY
FEE.—The 
amount of a capacity fee collected under paragraph 
(1) shall be equal to the greater of— 
(A) an amount equal to the acreage rent de-
scribed in subsection (b); and
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† HR 1 EAS 
(B) 3.9 percent of the gross proceeds from 
the sale of electricity produced by the renewable 
energy project. 
(3) MULTIPLE-USE REDUCTION FACTOR.— 
(A) APPLICATION.—The holder of a right-of- 
way for a wind energy generation project may 
request that the Secretary apply a multiple-use 
reduction factor of 10-percent to the amount of 
a capacity fee determined under paragraph (2) 
by submitting to the Secretary an application at 
such time, in such manner, and containing such 
information as the Secretary may require. 
(B) APPROVAL.—The Secretary may ap-
prove an application submitted under subpara-
graph (A) only if not less than 25 percent of the 
land within the area of the right-of-way is au-
thorized for use, occupancy, or development with 
respect to an activity other than the generation 
of wind energy for the entirety of the year in 
which the capacity fee is collected. 
(C) LATE DETERMINATION.— 
(i) IN GENERAL.—If the Secretary ap-
proves an application under subparagraph 
(B) for a wind energy generation project 
after the date on which the holder of the
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† HR 1 EAS 
right-of-way for the project begins paying a 
capacity fee, the Secretary shall apply the 
multiple-use reduction factor described in 
subparagraph (A) to the capacity fee for the 
first year beginning after the date of ap-
proval and each year thereafter for the pe-
riod during which the right-of-way remains 
in effect. 
(ii) REFUND.—The Secretary may not 
refund the holder of a right-of-way for the 
difference in the amount of a capacity fee 
paid in a previous year. 
(d) LATE PAYMENT FEE; TERMINATION.— 
(1) IN GENERAL.—The Secretary may charge the 
holder of a right-of-way for a renewable energy 
project a late payment fee if the Secretary does not 
receive payment for the acreage rent under subsection 
(b) or the capacity fee under subsection (c) by the 
date that is 15 days after the date on which the pay-
ment was due. 
(2) TERMINATION OF RIGHT-OF-WAY.—The Sec-
retary may terminate a right-of-way for a renewable 
energy project if the Secretary does not receive pay-
ment for the acreage rent under subsection (b) or the
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† HR 1 EAS 
capacity fee under subsection (c) by the date that is 
90 days after the date on which the payment was due. 
SEC. 50303. RENEWABLE ENERGY REVENUE SHARING. 
(a) DEFINITIONS.—In this section: 
(1) COUNTY.—The term ‘‘county’’ includes a 
parish, township, borough, and any other similar, 
independent unit of local government. 
(2) COVERED LAND.—The term ‘‘covered land’’ 
means land that is— 
(A) public land administered by the Sec-
retary; and 
(B) not excluded from the development of 
solar or wind energy under— 
(i) a land use plan; or 
(ii) other Federal law. 
(3) NATIONAL FOREST SYSTEM.— 
(A) IN GENERAL.—The term ‘‘National For-
est System’’ means land of the National Forest 
System (as defined in section 11(a) of the Forest 
and Rangeland Renewable Resources Planning 
Act of 1974 (16 U.S.C. 1609(a))) administered 
by the Secretary of Agriculture. 
(B) EXCLUSION.—The term ‘‘National For-
est System’’ does not include any forest reserve 
not created from the public domain.
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† HR 1 EAS 
(4) PUBLIC
LAND.—The term ‘‘public land’’ 
means— 
(A) public lands (as defined in section 103 
of the Federal Land Policy and Management Act 
of 1976 (43 U.S.C. 1702)); and 
(B) National Forest System land. 
(5) RENEWABLE ENERGY PROJECT.—The term 
‘‘renewable energy project’’ means a system described 
in section 2801.9(a)(4) of title 43, Code of Federal 
Regulations (as in effect on the date of enactment of 
this Act), located on covered land that uses wind or 
solar energy to generate energy. 
(6) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means— 
(A) the Secretary of the Interior, with re-
spect to land controlled or administered by the 
Secretary of the Interior; and 
(B) the Secretary of Agriculture, with re-
spect to National Forest System land. 
(b) DISPOSITION OF REVENUE.— 
(1) DISPOSITION OF REVENUES.—Beginning on 
January 1, 2026, the amounts collected from a renew-
able energy project as bonus bids, rentals, fees, or 
other payments under a right-of-way, permit, lease, 
or other authorization shall—
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† HR 1 EAS 
(A) be deposited in the general fund of the 
Treasury; and 
(B) without further appropriation or fiscal 
year limitation, be allocated as follows: 
(i) 25 percent shall be paid from 
amounts in the general fund of the Treasury 
to the State within the boundaries of which 
the revenue is derived. 
(ii) 25 percent shall be paid from 
amounts in the general fund of the Treasury 
to each county in a State within the bound-
aries of which the revenue is derived, to be 
allocated among each applicable county 
based on the percentage of county land from 
which the revenue is derived. 
(2) PAYMENTS TO STATES AND COUNTIES.— 
(A) IN GENERAL.—Amounts paid to States 
and counties under paragraph (1) shall be used 
in accordance with the requirements of section 
35 of the Mineral Leasing Act (30 U.S.C. 191). 
(B) PAYMENTS IN LIEU OF TAXES.—A pay-
ment to a county under paragraph (1) shall be 
in addition to a payment in lieu of taxes re-
ceived by the county under chapter 69 of title 31, 
United States Code.
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† HR 1 EAS 
(C) TIMING.—The amounts required to be 
paid under paragraph (1)(B) for an applicable 
fiscal year shall be made available in the fiscal 
year that immediately follows the fiscal year for 
which the amounts were collected. 
SEC. 50304. RESCISSION OF NATIONAL PARK SERVICE AND 
BUREAU OF LAND MANAGEMENT FUNDS. 
There are rescinded the unobligated balances of 
amounts made available by the following sections of Public 
Law 117–169 (commonly known as the ‘‘Inflation Reduc-
tion Act of 2022’’) (136 Stat. 1818): 
(1) Section 50221 (136 Stat. 2052). 
(2) Section 50222 (136 Stat. 2052). 
(3) Section 50223 (136 Stat. 2052). 
SEC. 50305. CELEBRATING AMERICA’S 250TH ANNIVERSARY. 
In addition to amounts otherwise available, there is 
appropriated to the Secretary of the Interior (acting 
through the Director of the National Park Service) for fiscal 
year 2025, out of any money in the Treasury not otherwise 
appropriated, $150,000,000 for events, celebrations, and ac-
tivities surrounding the observance and commemoration of 
the 250th anniversary of the founding of the United States, 
to remain available through fiscal year 2028.
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† HR 1 EAS 
Subtitle D—Energy 
SEC. 50401. STRATEGIC PETROLEUM RESERVE. 
(a) ENERGY POLICY AND CONSERVATION ACT DEFINI-
TIONS.—In this section, the terms ‘‘related facility’’, ‘‘stor-
age facility’’, and ‘‘Strategic Petroleum Reserve’’ have the 
meanings given those terms in section 152 of the Energy 
Policy and Conservation Act (42 U.S.C. 6232). 
(b) APPROPRIATIONS.—In addition to amounts other-
wise available, there is appropriated to the Department of 
Energy for fiscal year 2025, out of any money in the Treas-
ury not otherwise appropriated, to remain available until 
September 30, 2029— 
(1) $218,000,000 for maintenance of, including 
repairs to, storage facilities and related facilities of 
the Strategic Petroleum Reserve; and 
(2) $171,000,000 to acquire, by purchase, petro-
leum products for storage in the Strategic Petroleum 
Reserve. 
(c) REPEAL
OF STRATEGIC PETROLEUM RESERVE 
DRAWDOWN AND SALE MANDATE.—Section 20003 of Public 
Law 115–97 (42 U.S.C. 6241 note) is repealed. 
SEC. 50402. REPEALS; RESCISSIONS. 
(a) REPEAL AND RESCISSION.—Section 50142 of Pub-
lic Law 117–169 (136 Stat. 2044) (commonly known as the 
‘‘Inflation Reduction Act of 2022’’) is repealed and the un-
202 
† HR 1 EAS 
obligated balance of amounts made available under that sec-
tion (as in effect on the day before the date of enactment 
of this Act) is rescinded. 
(b) RESCISSIONS.— 
(1) IN GENERAL.—The unobligated balances of 
amounts made available under the sections described 
in paragraph (2) are rescinded. 
(2) SECTIONS DESCRIBED.—The sections referred 
to in paragraph (1) are the following sections of Pub-
lic Law 117–169 (commonly known as the ‘‘Inflation 
Reduction Act of 2022’’): 
(A) Section 50123 (42 U.S.C. 18795b). 
(B) Section 50141 (136 Stat. 2042). 
(C) Section 50144 (136 Stat. 2044). 
(D) Section 50145 (136 Stat. 2045). 
(E) Section 50151 (42 U.S.C. 18715). 
(F) Section 50152 (42 U.S.C. 18715a). 
(G) Section 50153 (42 U.S.C. 18715b). 
(H) Section 50161 (42 U.S.C. 17113b). 
SEC. 50403. ENERGY DOMINANCE FINANCING. 
(a) IN GENERAL.—Section 1706 of the Energy Policy 
Act of 2005 (42 U.S.C. 16517) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by striking ‘‘or’’ at 
the end;
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† HR 1 EAS 
(B) in paragraph (2), by striking ‘‘avoid’’ 
and all that follows through the period at the end 
and inserting ‘‘increase capacity or output; or’’; 
and 
(C) by adding at the end the following: 
‘‘(3) support or enable the provision of known or 
forecastable electric supply at time intervals necessary 
to maintain or enhance grid reliability or other sys-
tem adequacy needs.’’; 
(2) by striking subsection (c); 
(3) by redesignating subsections (d) through (f) 
as subsections (c) through (e), respectively; 
(4) in subsection (c) (as so redesignated)— 
(A) in paragraph (1), by adding ‘‘and’’ at 
the end; 
(B) by striking paragraph (2); and 
(C) by redesignating paragraph (3) as 
paragraph (2); 
(5) in subsection (e) (as so redesignated), by 
striking ‘‘for—’’ in the matter preceding paragraph 
(1) and all that follows through the period at the end 
of paragraph (2) and inserting ‘‘for enabling the 
identification, leasing, development, production, proc-
essing, transportation, transmission, refining, and
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† HR 1 EAS 
generation needed for energy and critical minerals.’’; 
and 
(6) by adding at the end the following: 
‘‘(f) FUNDING.— 
‘‘(1) IN GENERAL.—In addition to amounts oth-
erwise available, there is appropriated to the Sec-
retary for fiscal year 2025, out of any money in the 
Treasury not otherwise appropriated, $1,000,000,000, 
to remain available through September 30, 2028, to 
carry out activities under this section. 
‘‘(2) ADMINISTRATIVE
COSTS.—Of the amount 
made available under paragraph (1), the Secretary 
shall use not more than 3 percent for administrative 
expenses.’’. 
(b) COMMITMENT AUTHORITY.—Section 50144(b) of 
Public Law 117–169 (commonly known as the ‘‘Inflation 
Reduction Act of 2022’’) (136 Stat. 2045) is amended by 
striking ‘‘2026’’ and inserting ‘‘2028’’. 
SEC. 
50404. 
TRANSFORMATIONAL 
ARTIFICIAL 
INTEL-
LIGENCE MODELS. 
(a) DEFINITIONS.—In this section: 
(1) AMERICAN
SCIENCE
CLOUD.—The term 
‘‘American science cloud’’ means a system of United 
States government, academic, and private sector pro-
grams and infrastructures utilizing cloud computing
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† HR 1 EAS 
technologies to facilitate and support scientific re-
search, data sharing, and computational analysis 
across various disciplines while ensuring compliance 
with applicable legal, regulatory, and privacy stand-
ards. 
(2) ARTIFICIAL INTELLIGENCE.—The term ‘‘arti-
ficial intelligence’’ has the meaning given the term in 
section 5002 of the National Artificial Intelligence 
Initiative Act of 2020 (15 U.S.C. 9401). 
(b) TRANSFORMATIONAL MODELS.—The Secretary of 
Energy shall— 
(1) mobilize National Laboratories to partner 
with industry sectors within the United States to cu-
rate the scientific data of the Department of Energy 
across the National Laboratory complex so that the 
data is structured, cleaned, and preprocessed in a 
way that makes it suitable for use in artificial intel-
ligence and machine learning models; and 
(2) initiate seed efforts for self-improving artifi-
cial intelligence models for science and engineering 
powered by the data described in paragraph (1). 
(c) USES.— 
(1) MICROELECTRONICS.—The curated data de-
scribed in subsection (b)(1) may be used to rapidly 
develop next-generation microelectronics that have
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† HR 1 EAS 
greater capabilities beyond Moore’s law while requir-
ing lower energy consumption. 
(2) NEW ENERGY TECHNOLOGIES.—The artifi-
cial intelligence models developed under subsection 
(b)(2) shall be provided to the scientific community 
through the American science cloud to accelerate inno-
vation in discovery science and engineering for new 
energy technologies. 
(d) APPROPRIATIONS.—There is appropriated, out of 
any funds in the Treasury not otherwise appropriated, 
$150,000,000, to remain available through September 30, 
2026, to carry out this section. 
Subtitle E—Water 
SEC. 50501. WATER CONVEYANCE AND SURFACE WATER 
STORAGE ENHANCEMENT. 
In addition to amounts otherwise available, there is 
appropriated to the Secretary of the Interior, acting 
through the Commissioner of Reclamation, for fiscal year 
2025, out of any funds in the Treasury not otherwise appro-
priated, $1,000,000,000, to remain available through Sep-
tember 30, 2034, for construction and associated activities 
that restore or increase the capacity or use of existing con-
veyance facilities constructed by the Bureau of Reclamation 
or for construction and associated activities that increase 
the capacity of existing Bureau of Reclamation surface
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† HR 1 EAS 
water storage facilities, in a manner as determined by the 
Secretary of the Interior, acting through the Commissioner 
of Reclamation: Provided, That, for the purposes of section 
203 of the Reclamation Reform Act of 1982 (43 U.S.C. 
390cc) or section 3404(a) of the Reclamation Projects Au-
thorization and Adjustment Act of 1992 (Public Law 102– 
575; 106 Stat. 4708), a contract or agreement entered into 
pursuant to this section shall not be treated as a new or 
amended contract: Provided further, That none of the funds 
provided under this section shall be reimbursable or subject 
to matching or cost-sharing requirements. 
TITLE VI—COMMITTEE ON ENVI-
RONMENT 
AND 
PUBLIC 
WORKS 
SEC. 60001. RESCISSION OF FUNDING FOR CLEAN HEAVY- 
DUTY VEHICLES. 
The unobligated balances of amounts made available 
to carry out section 132 of the Clean Air Act (42 U.S.C. 
7432) are rescinded. 
SEC. 60002. REPEAL OF GREENHOUSE GAS REDUCTION 
FUND. 
Section 134 of the Clean Air Act (42 U.S.C. 7434) is 
repealed and the unobligated balances of amounts made 
available to carry out that section (as in effect on the day 
before the date of enactment of this Act) are rescinded.
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† HR 1 EAS 
SEC. 60003. RESCISSION OF FUNDING FOR DIESEL EMIS-
SIONS REDUCTIONS. 
The unobligated balances of amounts made available 
to carry out section 60104 of Public Law 117–169 (136 
Stat. 2067) are rescinded. 
SEC. 60004. RESCISSION OF FUNDING TO ADDRESS AIR POL-
LUTION. 
The unobligated balances of amounts made available 
to carry out section 60105 of Public Law 117–169 (136 
Stat. 2067) are rescinded. 
SEC. 60005. RESCISSION OF FUNDING TO ADDRESS AIR POL-
LUTION AT SCHOOLS. 
The unobligated balances of amounts made available 
to carry out section 60106 of Public Law 117–169 (136 
Stat. 2069) are rescinded. 
SEC. 60006. RESCISSION OF FUNDING FOR THE LOW EMIS-
SIONS ELECTRICITY PROGRAM. 
The unobligated balances of amounts made available 
to carry out section 135 of the Clean Air Act (42 U.S.C. 
7435) are rescinded. 
SEC. 60007. RESCISSION OF FUNDING FOR SECTION 211(O) 
OF THE CLEAN AIR ACT. 
The unobligated balances of amounts made available 
to carry out section 60108 of Public Law 117–169 (136 
Stat. 2070) are rescinded.
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† HR 1 EAS 
SEC. 60008. RESCISSION OF FUNDING FOR IMPLEMENTA-
TION OF THE AMERICAN INNOVATION AND 
MANUFACTURING ACT. 
The unobligated balances of amounts made available 
to carry out section 60109 of Public Law 117–169 (136 
Stat. 2071) are rescinded. 
SEC. 60009. RESCISSION OF FUNDING FOR ENFORCEMENT 
TECHNOLOGY AND PUBLIC INFORMATION. 
The unobligated balances of amounts made available 
to carry out section 60110 of Public Law 117–169 (136 
Stat. 2071) are rescinded. 
SEC. 60010. RESCISSION OF FUNDING FOR GREENHOUSE 
GAS CORPORATE REPORTING. 
The unobligated balances of amounts made available 
to carry out section 60111 of Public Law 117–169 (136 
Stat. 2072) are rescinded. 
SEC. 60011. RESCISSION OF FUNDING FOR ENVIRON-
MENTAL 
PRODUCT 
DECLARATION 
ASSIST-
ANCE. 
The unobligated balances of amounts made available 
to carry out section 60112 of Public Law 117–169 (42 
U.S.C. 4321 note; 136 Stat. 2072) are rescinded.
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† HR 1 EAS 
SEC. 60012. RESCISSION OF FUNDING FOR METHANE EMIS-
SIONS AND WASTE REDUCTION INCENTIVE 
PROGRAM FOR PETROLEUM AND NATURAL 
GAS SYSTEMS. 
(a) 
RESCISSION.—The 
unobligated 
balances 
of 
amounts made available to carry out subsections (a) and 
(b) of section 136 of the Clean Air Act (42 U.S.C. 7436) 
are rescinded. 
(b) PERIOD.—Section 136(g) of the Clean Air Act (42 
U.S.C. 7436(g)) is amended by striking ‘‘calendar year 
2024’’ and inserting ‘‘calendar year 2034’’. 
SEC. 60013. RESCISSION OF FUNDING FOR GREENHOUSE 
GAS AIR POLLUTION PLANS AND IMPLEMEN-
TATION GRANTS. 
The unobligated balances of amounts made available 
to carry out section 137 of the Clean Air Act (42 U.S.C. 
7437) are rescinded. 
SEC. 60014. RESCISSION OF FUNDING FOR ENVIRON-
MENTAL PROTECTION AGENCY EFFICIENT, 
ACCURATE, AND TIMELY REVIEWS. 
The unobligated balances of amounts made available 
to carry out section 60115 of Public Law 117–169 (136 
Stat. 2077) are rescinded.
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† HR 1 EAS 
SEC. 60015. RESCISSION OF FUNDING FOR LOW-EMBODIED 
CARBON LABELING FOR CONSTRUCTION MA-
TERIALS. 
The unobligated balances of amounts made available 
to carry out section 60116 of Public Law 117–169 (42 
U.S.C. 4321 note; 136 Stat. 2077) are rescinded. 
SEC. 60016. RESCISSION OF FUNDING FOR ENVIRON-
MENTAL 
AND 
CLIMATE 
JUSTICE 
BLOCK 
GRANTS. 
The unobligated balances of amounts made available 
to carry out section 138 of the Clean Air Act (42 U.S.C. 
7438) are rescinded. 
SEC. 60017. RESCISSION OF FUNDING FOR ESA RECOVERY 
PLANS. 
The unobligated balances of amounts made available 
to carry out section 60301 of Public Law 117–169 (136 
Stat. 2079) are rescinded. 
SEC. 60018. RESCISSION OF FUNDING FOR ENVIRON-
MENTAL AND CLIMATE DATA COLLECTION. 
The unobligated balances of amounts made available 
to carry out section 60401 of Public Law 117–169 (136 
Stat. 2079) are rescinded.
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† HR 1 EAS 
SEC. 60019. RESCISSION OF NEIGHBORHOOD ACCESS AND 
EQUITY GRANT PROGRAM. 
The unobligated balances of amounts made available 
to carry out section 177 of title 23, United States Code, 
are rescinded. 
SEC. 60020. RESCISSION OF FUNDING FOR FEDERAL BUILD-
ING ASSISTANCE. 
The unobligated balances of amounts made available 
to carry out section 60502 of Public Law 117–169 (136 
Stat. 2083) are rescinded. 
SEC. 60021. RESCISSION OF FUNDING FOR LOW-CARBON 
MATERIALS FOR FEDERAL BUILDINGS. 
The unobligated balances of amounts made available 
to carry out section 60503 of Public Law 117–169 (136 
Stat. 2083) are rescinded. 
SEC. 60022. RESCISSION OF FUNDING FOR GSA EMERGING 
AND SUSTAINABLE TECHNOLOGIES. 
The unobligated balances of amounts made available 
to carry out section 60504 of Public Law 117–169 (136 
Stat. 2083) are rescinded. 
SEC. 60023. RESCISSION OF ENVIRONMENTAL REVIEW IM-
PLEMENTATION FUNDS. 
The unobligated balances of amounts made available 
to carry out section 178 of title 23, United States Code, 
are rescinded.
213 
† HR 1 EAS 
SEC. 
60024. 
RESCISSION 
OF 
LOW-CARBON 
TRANSPOR-
TATION MATERIALS GRANTS. 
The unobligated balances of amounts made available 
to carry out section 179 of title 23, United States Code, 
are rescinded. 
SEC. 60025. JOHN F. KENNEDY CENTER FOR THE PER-
FORMING ARTS. 
(a) IN GENERAL.—In addition to amounts otherwise 
available, there is appropriated for fiscal year 2025, out 
of any money in the Treasury not otherwise appropriated, 
$256,657,000, to remain available until September 30, 
2029, for necessary expenses for capital repair, restoration, 
maintenance backlog, and security structures of the build-
ing and site of the John F. Kennedy Center for the Per-
forming Arts. 
(b) ADMINISTRATIVE COSTS.—Of the amounts made 
available under subsection (a), not more than 3 percent 
may be used for administrative costs necessary to carry out 
this section. 
SEC. 60026. PROJECT SPONSOR OPT-IN FEES FOR ENVIRON-
MENTAL REVIEWS. 
Title I of the National Environmental Policy Act of 
1969 (42 U.S.C. 4331 et seq.) is amended by adding at the 
end the following:
214 
† HR 1 EAS 
‘‘SEC. 112. PROJECT SPONSOR OPT-IN FEES FOR ENVIRON-
MENTAL REVIEWS. 
‘‘(a) PROCESS.— 
‘‘(1) PROJECT SPONSOR.—A project sponsor that 
intends to pay a fee under this section for the prepa-
ration, or supervision of the preparation, of an envi-
ronmental assessment or environmental impact state-
ment for a project shall submit to the Council— 
‘‘(A) a description of the project; and 
‘‘(B) a declaration of whether the project 
sponsor intends to prepare the environmental as-
sessment or environmental impact statement 
under section 107(f). 
‘‘(2) COUNCIL ON ENVIRONMENTAL QUALITY.— 
Not later than 15 days after the date on which the 
Council receives information described in paragraph 
(1) from a project sponsor, the Council shall provide 
to the project sponsor notice of the amount of the fee 
to be paid under this section, as determined under 
subsection (b). 
‘‘(3) PAYMENT OF FEE.—A project sponsor may 
pay a fee under this section after receipt of the notice 
described in paragraph (2). 
‘‘(4) DEADLINE FOR ENVIRONMENTAL REVIEWS 
FOR WHICH A FEE IS PAID.—Notwithstanding section 
107(g)(1)—
215 
† HR 1 EAS 
‘‘(A) an environmental assessment for which 
a fee is paid under this section shall be com-
pleted not later than 180 days after the date on 
which the fee is paid; and 
‘‘(B) an environmental impact statement 
for which a fee is paid under this section shall 
be completed not later than 1 year after the date 
of publication of the notice of intent to prepare 
the environmental impact statement. 
‘‘(b) FEE AMOUNT.—The amount of a fee under this 
section shall be— 
‘‘(1) 125 percent of the anticipated costs to pre-
pare the environmental assessment or environmental 
impact statement; and 
‘‘(2) in the case of an environmental assessment 
or environmental impact statement to be prepared in 
whole or in part by a project sponsor under section 
107(f), 125 percent of the anticipated costs to super-
vise preparation of, and, as applicable, prepare, the 
environmental assessment or environmental impact 
statement.’’.
216 
† HR 1 EAS 
TITLE VII—FINANCE 
Subtitle A—Tax 
SEC. 70001. REFERENCES TO THE INTERNAL REVENUE 
CODE OF 1986, ETC. 
(a) REFERENCES.—Except as otherwise expressly pro-
vided, whenever in this title, an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a sec-
tion or other provision, the reference shall be considered to 
be made to a section or other provision of the Internal Rev-
enue Code of 1986. 
(b) CERTAIN RULES REGARDING EFFECT OF RATE 
CHANGES NOT APPLICABLE.—Section 15 of the Internal 
Revenue Code of 1986 shall not apply to any change in 
rate of tax by reason of any provision of, or amendment 
made by, this title. 
CHAPTER 1—PROVIDING PERMANENT TAX 
RELIEF FOR MIDDLE-CLASS FAMILIES 
AND WORKERS 
SEC. 70101. EXTENSION AND ENHANCEMENT OF REDUCED 
RATES. 
(a) IN GENERAL.—Section 1(j) is amended— 
(1) in paragraph (1), by striking ‘‘, and before 
January 1, 2026’’, and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’.
217 
† HR 1 EAS 
(b) INFLATION ADJUSTMENT.—Section 1(j)(3)(B)(i) is 
amended by inserting ‘‘solely for purposes of determining 
the dollar amounts at which any rate bracket higher than 
12 percent ends and at which any rate bracket higher than 
22 percent begins,’’ before ‘‘subsection (f)(3)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70102. EXTENSION AND ENHANCEMENT OF INCREASED 
STANDARD DEDUCTION. 
(a) IN GENERAL.—Section 63(c)(7) is amended— 
(1) by striking ‘‘, and before January 1, 2026’’ 
in the matter preceding subparagraph (A), and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’. 
(b) ADDITIONAL INCREASE
IN STANDARD DEDUC-
TION.—Paragraph (7) of section 63(c) is amended— 
(1) by striking ‘‘$18,000’’ both places it appears 
in subparagraphs (A)(i) and (B)(ii) and inserting 
‘‘$23,625’’, 
(2) by striking ‘‘$12,000’’ both places it appears 
in subparagraphs (A)(ii) and (B)(ii) and inserting 
‘‘$15,750’’, 
(3) by striking ‘‘2018’’ in subparagraph (B)(ii) 
and inserting ‘‘2025’’, and
218 
† HR 1 EAS 
(4) 
by 
striking 
‘‘2017’’ 
in 
subparagraph 
(B)(ii)(II) and inserting ‘‘2024’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2024. 
SEC. 70103. TERMINATION OF DEDUCTION FOR PERSONAL 
EXEMPTIONS OTHER THAN TEMPORARY SEN-
IOR DEDUCTION. 
(a) IN GENERAL.—Section 151(d)(5) is amended— 
(1) by striking ‘‘2018
THROUGH
2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’, 
(2) by striking ‘‘, and before January 1, 2026’’, 
and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(C) DEDUCTION FOR SENIORS.— 
‘‘(i) IN GENERAL.—In the case of a 
taxable year beginning before January 1, 
2029, there shall be allowed a deduction in 
an amount equal to $6,000 for each quali-
fied individual with respect to the taxpayer. 
‘‘(ii) 
QUALIFIED
INDIVIDUAL.—For 
purposes of clause (i), the term ‘qualified 
individual’ means—
219 
† HR 1 EAS 
‘‘(I) the taxpayer, if the taxpayer 
has attained age 65 before the close of 
the taxable year, and 
‘‘(II) in the case of a joint return, 
the taxpayer’s spouse, if such spouse 
has attained age 65 before the close of 
the taxable year. 
‘‘(iii) LIMITATION BASED ON MODIFIED 
ADJUSTED GROSS INCOME.— 
‘‘(I) IN GENERAL.—In the case of 
any taxpayer for any taxable year, the 
$6,000 amount in clause (i) shall be 
reduced (but not below zero) by 6 per-
cent of so much of the taxpayer’s modi-
fied adjusted gross income as exceeds 
$75,000 ($150,000 in the case of a 
joint return). 
‘‘(II) MODIFIED ADJUSTED GROSS 
INCOME.—For purposes of this clause, 
the term ‘modified adjusted gross in-
come’ means the adjusted gross income 
of the taxpayer for the taxable year in-
creased by any amount excluded from 
gross income under section 911, 931, or 
933.
220 
† HR 1 EAS 
‘‘(iv) SOCIAL SECURITY NUMBER RE-
QUIRED.— 
‘‘(I) IN
GENERAL.—Clause (i) 
shall not apply with respect to a quali-
fied individual unless the taxpayer in-
cludes such qualified individual’s so-
cial security number on the return of 
tax for the taxable year. 
‘‘(II) 
SOCIAL
SECURITY
NUM-
BER.—For purposes of subclause (I), 
the term ‘social security number’ has 
the meaning given such term in section 
24(h)(7). 
‘‘(v) MARRIED
INDIVIDUALS.—If the 
taxpayer is a married individual (within 
the meaning of section 7703), this subpara-
graph shall apply only if the taxpayer and 
the taxpayer’s spouse file a joint return for 
the taxable year.’’. 
(b) OMISSION OF CORRECT SOCIAL SECURITY NUMBER 
TREATED AS MATHEMATICAL OR CLERICAL ERROR.—Sec-
tion 6213(g)(2) is amended by striking ‘‘and’’ at the end 
of subparagraph (U), by striking the period at the end of 
subparagraph (V) and inserting ‘‘, and’’, and by inserting 
after subparagraph (V) the following new subparagraph:
221 
† HR 1 EAS 
‘‘(W) an omission of a correct social secu-
rity number required under section 151(d)(5)(C) 
(relating to deduction for seniors).’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2024. 
SEC. 70104. EXTENSION AND ENHANCEMENT OF INCREASED 
CHILD TAX CREDIT. 
(a) EXTENSION AND INCREASE OF EXPANDED CHILD 
TAX CREDIT.—Section 24(h) is amended— 
(1) in paragraph (1), by striking ‘‘, and before 
January 1, 2026’’, 
(2) in paragraph (2), by striking ‘‘$2,000’’ and 
inserting ‘‘$2,200’’, and 
(3) by striking ‘‘2018 THROUGH 2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’. 
(b) SOCIAL SECURITY NUMBER REQUIRED.—Section 
24(h)(7) is amended to read as follows: 
‘‘(7) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(A) IN GENERAL.—No credit shall be al-
lowed under this section to a taxpayer with re-
spect to any qualifying child unless the taxpayer 
includes on the return of tax for the taxable 
year—
222 
† HR 1 EAS 
‘‘(i) the taxpayer’s social security 
number (or, in the case of a joint return, 
the social security number of at least 1 
spouse), and 
‘‘(ii) the social security number of such 
qualifying child. 
‘‘(B) SOCIAL SECURITY NUMBER.—For pur-
poses of this paragraph, the term ‘social security 
number’ means a social security number issued 
to an individual by the Social Security Admin-
istration, but only if the social security number 
is issued— 
‘‘(i) to a citizen of the United States or 
pursuant to subclause (I) (or that portion of 
subclause (III) that relates to subclause (I)) 
of section 205(c)(2)(B)(i) of the Social Secu-
rity Act, and 
‘‘(ii) before the due date for such re-
turn.’’. 
(c) INFLATION
ADJUSTMENTS.—Section 24(i) is 
amended to read as follows: 
‘‘(i) INFLATION ADJUSTMENTS.— 
‘‘(1) MAXIMUM AMOUNT OF REFUNDABLE CRED-
IT.—In the case of a taxable year beginning after
223 
† HR 1 EAS 
2024, the $1,400 amount in subsection (h)(5) shall be 
increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, determined by 
substituting ‘2017’ for ‘2016’ in subparagraph 
(A)(ii) thereof. 
‘‘(2) SPECIAL RULE FOR ADJUSTMENT OF CRED-
IT AMOUNT.—In the case of a taxable year beginning 
after 2025, the $2,200 amount in subsection (h)(2) 
shall be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, determined by 
substituting ‘2024’ for ‘2016’ in subparagraph 
(A)(ii) thereof. 
‘‘(3) ROUNDING.—If any increase under this 
subsection is not a multiple of $100, such increase 
shall be rounded to the next lowest multiple of $100.’’. 
(d) CONFORMING AMENDMENT.—Section 24(h)(5) is 
amended to read as follows: 
‘‘(5) MAXIMUM AMOUNT OF REFUNDABLE CRED-
IT.—The 
amount 
determined 
under 
subsection
224 
† HR 1 EAS 
(d)(1)(A) with respect to any qualifying child shall 
not exceed $1,400, and such subsection shall be ap-
plied without regard to paragraph (4) of this sub-
section.’’. 
(e) OMISSION OF CORRECT SOCIAL SECURITY NUMBER 
TREATED AS MATHEMATICAL OR CLERICAL ERROR.—Sec-
tion 6213(g)(2)(I) is amended by striking ‘‘section 24(e)’’ 
and inserting ‘‘section 24’’. 
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2024. 
SEC. 70105. EXTENSION AND ENHANCEMENT OF DEDUC-
TION FOR QUALIFIED BUSINESS INCOME. 
(a) INCREASE
IN
TAXABLE
INCOME
LIMITATION 
PHASE-IN AMOUNTS.— 
(1) IN GENERAL.—Subparagraph (B) of section 
199A(b)(3) 
is 
amended 
by 
striking 
‘‘$50,000 
($100,000 in the case of a joint return)’’ each place 
it appears and inserting ‘‘$75,000 ($150,000 in the 
case of a joint return)’’. 
(2) CONFORMING AMENDMENT.—Paragraph (3) 
of section 199A(d) is amended by striking ‘‘$50,000 
($100,000 in the case of a joint return)’’ each place 
it appears and inserting ‘‘$75,000 ($150,000 in the 
case of a joint return)’’.
225 
† HR 1 EAS 
(b) MINIMUM DEDUCTION
FOR ACTIVE QUALIFIED 
BUSINESS INCOME.— 
(1) IN GENERAL.—Subsection (i) of section 199A 
is amended to read as follows: 
‘‘(i) MINIMUM DEDUCTION FOR ACTIVE QUALIFIED 
BUSINESS INCOME.— 
‘‘(1) IN GENERAL.—In the case of an applicable 
taxpayer for any taxable year, the deduction allowed 
under subsection (a) for the taxable year shall be 
equal to the greater of— 
‘‘(A) the amount of such deduction deter-
mined without regard to this subsection, or 
‘‘(B) $400. 
‘‘(2) APPLICABLE TAXPAYER.—For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘applicable 
taxpayer’ means, with respect to any taxable 
year, a taxpayer whose aggregate qualified busi-
ness income with respect to all active qualified 
trades or businesses of the taxpayer for such tax-
able year is at least $1,000. 
‘‘(B) ACTIVE QUALIFIED TRADE OR BUSI-
NESS.—The term ‘active qualified trade or busi-
ness’ means, with respect to any taxpayer for 
any taxable year, any qualified trade or business
226 
† HR 1 EAS 
of the taxpayer in which the taxpayer materially 
participates (within the meaning of section 
469(h)). 
‘‘(3) INFLATION
ADJUSTMENT.—In the case of 
any taxable year beginning after 2026, the $400 
amount in paragraph (1)(B) and the $1,000 amount 
in paragraph (2)(A) shall each be increased by an 
amount equal to — 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, determined by 
substituting ‘calendar year 2025’ for ‘calendar 
year 2016’ in subparagraph (A)(ii) thereof. 
If any increase under this paragraph is not a mul-
tiple of $5, such increase shall be rounded to the near-
est multiple of $5.’’. 
(2) CONFORMING AMENDMENT.—Section 199A(a) 
is amended by inserting ‘‘except as provided in sub-
section (i),’’ before ‘‘there’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025.
227 
† HR 1 EAS 
SEC. 70106. EXTENSION AND ENHANCEMENT OF INCREASED 
ESTATE AND GIFT TAX EXEMPTION AMOUNTS. 
(a) IN GENERAL.—Section 2010(c)(3) is amended— 
(1) 
in 
subparagraph 
(A) 
by 
striking 
‘‘$5,000,000’’ and inserting ‘‘$15,000,000’’, 
(2) in subparagraph (B)— 
(A) in the matter preceding clause (i), by 
striking ‘‘2011’’ and inserting ‘‘2026’’, and 
(B) in clause (ii), by striking ‘‘calendar 
year 2010’’ and inserting ‘‘calendar year 2025’’, 
and 
(3) by striking subparagraph (C). 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to estates of decedents dying and gifts 
made after December 31, 2025. 
SEC. 70107. EXTENSION OF INCREASED ALTERNATIVE MIN-
IMUM TAX EXEMPTION AMOUNTS AND MODI-
FICATION OF PHASEOUT THRESHOLDS. 
(a) IN GENERAL.—Section 55(d)(4) is amended— 
(1) in subparagraph (A), by striking ‘‘, and be-
fore January 1, 2026’’, and 
(2) by striking ‘‘AND BEFORE 2026’’ in the head-
ing. 
(b) MODIFICATION OF INFLATION ADJUSTMENT.—Sec-
tion 55(d)(4)(B) is amended—
228 
† HR 1 EAS 
(1) by striking ‘‘2018’’ and inserting ‘‘2018 
(2026, in the case of the $1,000,000 amount in sub-
paragraph (A)(ii)(I))’’, and 
(2) by striking ‘‘determined by substituting ‘cal-
endar year 2017’ for ‘calendar year 2016’ in subpara-
graph (A)(ii) thereof.’’ and inserting ‘‘determined by 
substituting for ‘calendar year 2016’ in subparagraph 
(A)(ii) thereof— 
‘‘(1) ‘calendar year 2017’, in the case of the 
$109,400 amount in subparagraph (A)(i)(I) and the 
$70,300 amount in subparagraph (A)(i)(II), and 
‘‘(2) ‘calendar year 2025’, in the case of the 
$1,000,000 amount in subparagraph (A)(ii)(I).’’. 
(c) MODIFICATION OF PHASEOUT AMOUNT.—Section 
55(d)(4)(A)(ii) is amended by striking ‘‘and’’ at the end 
of subclause (II), and by adding at the end the following 
new subclause: 
‘‘(IV) by substituting ‘50 percent’ 
for ‘25 percent’, and’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025.
229 
† HR 1 EAS 
SEC. 70108. EXTENSION AND MODIFICATION OF LIMITATION 
ON DEDUCTION FOR QUALIFIED RESIDENCE 
INTEREST. 
(a) IN GENERAL.—Section 163(h)(3)(F) is amended— 
(1) in clause (i)— 
(A) by striking ‘‘, and before January 1, 
2026’’, 
(B) by redesignating subclauses (III) and 
(IV) as subclauses (IV) and (V), respectively, 
(C) by striking ‘‘subclause (III)’’ in sub-
clause (V), as so redesignated, and inserting 
‘‘subclause (IV)’’, and 
(D) by inserting after subclause (II) the fol-
lowing new subclause: 
‘‘(III) 
MORTGAGE
INSURANCE 
PREMIUMS
TREATED
AS
INTEREST.— 
Clause (iv) of subparagraph (E) shall 
not apply.’’, 
(2) by striking clause (ii) and redesignating 
clauses (iii) and (iv) as clauses (ii) and (iii), respec-
tively, and 
(3) by striking ‘‘2018 THROUGH 2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025.
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† HR 1 EAS 
SEC. 70109. EXTENSION AND MODIFICATION OF LIMITATION 
ON CASUALTY LOSS DEDUCTION. 
(a) IN GENERAL.—Section 165(h)(5) is amended— 
(1) in subparagraph (A), by striking ‘‘, and be-
fore January 1, 2026’’, and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’. 
(b) EXTENSION TO STATE DECLARED DISASTERS.— 
(1) IN GENERAL.—Subparagraph (A) of section 
165(h)(5), as amended by subsection (a), is further 
amended by striking ‘‘(i)(5))’’ and inserting ‘‘(i)(5)) 
or a State declared disaster’’. 
(2) EXCEPTION
RELATED
TO
PERSONAL
CAS-
UALTY GAINS.—Clause (i) of section 165(h)(5)(B) is 
amended by striking ‘‘(as so defined)’’ and inserting 
‘‘(as so defined) or a State declared disaster’’. 
(3) STATE
DECLARED
DISASTER.—Paragraph 
(5) of section 165(h) is amended by adding at the end 
the following new subparagraph: 
‘‘(C) STATE
DECLARED
DISASTER.—For 
purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘State de-
clared disaster’ means, with respect to any 
State, any natural catastrophe (including 
any hurricane, tornado, storm, high water, 
wind-driven water, tidal wave, tsunami,
231 
† HR 1 EAS 
earthquake, volcanic eruption, landslide, 
mudslide, snowstorm, or drought), or, re-
gardless of cause, any fire, flood, or explo-
sion, in any part of the State, which in the 
determination of the Governor of such State 
(or the Mayor, in the case of the District of 
Columbia) and the Secretary causes damage 
of sufficient severity and magnitude to war-
rant the application of the rules of this sec-
tion. 
‘‘(ii) STATE.—The term ‘State’ in-
cludes the District of Columbia, the Com-
monwealth of Puerto Rico, the Virgin Is-
lands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Is-
lands.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70110. TERMINATION OF MISCELLANEOUS ITEMIZED 
DEDUCTIONS OTHER THAN EDUCATOR EX-
PENSES. 
(a) IN GENERAL.—Section 67(g) is amended— 
(1) by striking ‘‘, and before January 1, 2026’’, 
and
232 
† HR 1 EAS 
(2) by striking ‘‘2018 THROUGH 2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’. 
(b) DEDUCTION FOR EDUCATOR EXPENSES.— 
(1) IN GENERAL.—Section 67(b) is amended by 
striking ‘‘and’’ at the end of paragraph (11), by strik-
ing the period at the end of paragraph (12) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(13) the deductions allowed by section 162 for 
educator expenses (as defined in subsection (g)).’’. 
(2) INCLUSION OF COACHES AND CERTAIN NON-
ATHLETIC
INSTRUCTIONAL
EQUIPMENT.—Section 67 
is amended by redesignating subsection (g), as 
amended by this section, as subsection (h), and by in-
serting after subsection (f) the following new section: 
‘‘(g) EDUCATOR EXPENSES.—For purposes of sub-
section (b)(13), the term ‘educator expenses’ means expenses 
of a type which would be described in section 62(a)(2)(D) 
if— 
‘‘(1) such section were applied— 
‘‘(A) without regard to the dollar limita-
tion, 
‘‘(B) without regard to ‘(other than nonath-
letic supplies for courses of instruction in health 
or physical education)’ in clause (ii) thereof, and
233 
† HR 1 EAS 
‘‘(C) by substituting ‘as part of instruc-
tional activity’ for ‘in the classroom’ in clause 
(ii) thereof, and 
‘‘(2) section 62(d)(1)(A) were applied by insert-
ing ‘, interscholastic sports administrator or coach,’ 
after ‘counselor’.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70111. LIMITATION ON TAX BENEFIT OF ITEMIZED DE-
DUCTIONS. 
(a) IN GENERAL.—Section 68 is amended to read as 
follows: 
‘‘(a) IN GENERAL.—In the case of an individual, the 
amount of the itemized deductions otherwise allowable for 
the taxable year (determined without regard to this section) 
shall be reduced by 2⁄37 of the lesser of— 
‘‘(1) such amount of itemized deductions, or 
‘‘(2) so much of the taxable income of the tax-
payer for the taxable year (determined without regard 
to this section and increased by such amount of 
itemized deductions) as exceeds the dollar amount at 
which the 37 percent rate bracket under section 1 be-
gins with respect to the taxpayer.
234 
† HR 1 EAS 
‘‘(b) COORDINATION WITH OTHER LIMITATIONS.— 
This section shall be applied after the application of any 
other limitation on the allowance of any itemized deduc-
tion.’’. 
(b) LIMITATION NOT APPLICABLE TO DETERMINATION 
OF DEDUCTION FOR QUALIFIED BUSINESS INCOME.— 
(1) IN GENERAL.—Section 199A(e)(1) is amend-
ed by inserting ‘‘without regard to section 68 and’’ 
after ‘‘shall be computed’’. 
(2) PATRONS OF SPECIFIED AGRICULTURAL AND 
HORTICULTURAL
COOPERATIVES.—Section 
199A(g)(2)(B) is amended by inserting ‘‘section 68 
or’’ after ‘‘without regard to’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70112. EXTENSION AND MODIFICATION OF QUALIFIED 
TRANSPORTATION FRINGE BENEFITS. 
(a) IN GENERAL.—Section 132(f) is amended— 
(1) by striking subparagraph (D) of paragraph 
(1), 
(2) in paragraph (2), by inserting ‘‘and’’ at the 
end of subparagraph (A), by striking ‘‘, and’’ at the 
end of subparagraph (B) and inserting a period, and 
by striking subparagraph (C),
235 
† HR 1 EAS 
(3) by striking ‘‘(other than a qualified bicycle 
commuting reimbursement)’’ in paragraph (4), 
(4) by striking subparagraph (F) of paragraph 
(5), and 
(5) by striking paragraph (8). 
(b) INFLATION ADJUSTMENT.—Clause (ii) of section 
132(f)(6)(A) is amended by striking ‘‘1998’’ in clause (ii) 
and inserting ‘‘1997’’. 
(c) COORDINATION WITH DISALLOWANCE OF CERTAIN 
EXPENSES.—Subsection (l) of section 274 is amended— 
(1) by striking ‘‘BENEFITS.—’’ and all that fol-
lows through ‘‘No deduction’’ and inserting ‘‘BENE-
FITS.—No deduction’’, and 
(2) by striking paragraph (2). 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70113. EXTENSION AND MODIFICATION OF LIMITATION 
ON DEDUCTION AND EXCLUSION FOR MOV-
ING EXPENSES. 
(a) EXTENSION OF LIMITATION ON DEDUCTION.—Sec-
tion 217(k) is amended— 
(1) by striking ‘‘, and before January 1, 2026’’, 
and
236 
† HR 1 EAS 
(2) by striking ‘‘2018 THROUGH 2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’. 
(b) ALLOWANCE OF DEDUCTION FOR MEMBERS OF 
THE
INTELLIGENCE
COMMUNITY.—Section 217(k), as 
amended by subsection (a), is further amended— 
(1) by striking ‘‘2017.—Except in the case’’ and 
inserting ‘‘2017.— 
‘‘(1) IN GENERAL.—Except in the case’’, and 
(2) by adding at the end the following new para-
graph: 
‘‘(2) MEMBERS OF THE INTELLIGENCE COMMU-
NITY.—An employee or new appointee of the intel-
ligence community (as defined in section 3 of the Na-
tional Security Act of 1947 (50 U.S.C. 3003)) (other 
than a member of the Armed Forces of the United 
States) who moves pursuant to a change in assign-
ment which requires relocation shall be treated for 
purposes of this section in the same manner as an in-
dividual to whom subsection (g) applies.’’. 
(c) EXTENSION OF LIMITATION ON EXCLUSION.—Sec-
tion 132(g)(2) is amended— 
(1) by striking ‘‘, and before January 1, 2026’’, 
and 
(2) by striking ‘‘2018 THROUGH 2025’’ in the 
heading and inserting ‘‘BEGINNING AFTER 2017’’.
237 
† HR 1 EAS 
(d) ALLOWANCE OF EXCLUSION FOR MEMBERS OF THE 
INTELLIGENCE COMMUNITY.—Section 132(g)(2) of the In-
ternal Revenue Code of 1986 is amended by inserting ‘‘, 
or an employee or new appointee of the intelligence commu-
nity (as defined in section 3 of the National Security Act 
of 1947 (50 U.S.C. 3003)) (other than a member of the 
Armed Forces of the United States) who moves pursuant 
to a change in assignment that requires relocation’’ after 
‘‘change of station’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70114. EXTENSION AND MODIFICATION OF LIMITATION 
ON WAGERING LOSSES. 
(a) IN GENERAL.—Section 165 is amended by striking 
subsection (d) and inserting the following: 
‘‘(d) WAGERING LOSSES.— 
‘‘(1) IN GENERAL.—For purposes of losses from 
wagering transactions, the amount allowed as a de-
duction for any taxable year— 
‘‘(A) shall be equal to 90 percent of the 
amount of such losses during such taxable year, 
and
238 
† HR 1 EAS 
‘‘(B) shall be allowed only to the extent of 
the gains from such transactions during such 
taxable year. 
‘‘(2) SPECIAL RULE.—For purposes of paragraph 
(1), the term ‘losses from wagering transactions’ in-
cludes any deduction otherwise allowable under this 
chapter incurred in carrying on any wagering trans-
action.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70115. EXTENSION AND ENHANCEMENT OF INCREASED 
LIMITATION ON CONTRIBUTIONS TO ABLE 
ACCOUNTS. 
(a) IN GENERAL.—Section 529A(b)(2)(B) is amend-
ed— 
(1) in clause (i), by inserting ‘‘(determined by 
substituting ‘1996’ for ‘1997’ in paragraph (2)(B) 
thereof)’’ after ‘‘section 2503(b)’’, and 
(2) in clause (ii), by striking ‘‘before January 1, 
2026’’. 
(b) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
239 
† HR 1 EAS 
tion shall apply to contributions made after December 
31, 2025. 
(2) MODIFIED
INFLATION
ADJUSTMENT.—The 
amendment made by subsection (a)(1) shall apply to 
taxable years beginning after December 31, 2025. 
SEC. 70116. EXTENSION AND ENHANCEMENT OF SAVERS 
CREDIT 
ALLOWED 
FOR 
ABLE 
CONTRIBU-
TIONS. 
(a) EXTENSION.— 
(1) IN GENERAL.—Section 25B(d)(1) is amended 
to read as follows: 
‘‘(1) IN GENERAL.—The term ‘qualified retire-
ment savings contributions’ means, with respect to 
any taxable year, the sum of— 
‘‘(A) the amount of contributions made by 
the eligible individual during such taxable year 
to the ABLE account (within the meaning of sec-
tion 529A) of which such individual is the des-
ignated beneficiary, and 
‘‘(B) in the case of any taxable year begin-
ning before January 1, 2027— 
‘‘(i) the amount of the qualified retire-
ment contributions (as defined in section 
219(e)) made by the eligible individual, 
‘‘(ii) the amount of—
240 
† HR 1 EAS 
‘‘(I) any elective deferrals (as de-
fined in section 402(g)(3)) of such in-
dividual, and 
‘‘(II) any elective deferral of com-
pensation by such individual under an 
eligible deferred compensation plan (as 
defined in section 457(b)) of an eligible 
employer 
described 
in 
section 
457(e)(1)(A), and 
‘‘(iii) the amount of voluntary em-
ployee contributions by such individual to 
any qualified retirement plan (as defined in 
section 4974(c)).’’. 
(2) COORDINATION WITH SECURE 2.0 ACT OF 2022 
AMENDMENT.—Paragraph (1) of section 103(e) of the 
SECURE 2.0 Act of 2022 is repealed, and the Inter-
nal Revenue Code of 1986 shall be applied and ad-
ministered as though such paragraph were never en-
acted. 
(3) EFFECTIVE DATE.—The amendments and re-
peal made by this subsection shall apply to taxable 
years ending after December 31, 2025. 
(b) INCREASE OF CREDIT AMOUNT.— 
(1) IN GENERAL.—Section 25B(a) is amended by 
striking ‘‘$2,000’’ and inserting ‘‘$2,100’’.
241 
† HR 1 EAS 
(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall apply to taxable years beginning 
after December 31, 2026. 
SEC. 70117. EXTENSION OF ROLLOVERS FROM QUALIFIED 
TUITION PROGRAMS TO ABLE ACCOUNTS 
PERMITTED. 
(a) IN
GENERAL.—Section 529(c)(3)(C)(i)(III) is 
amended by striking ‘‘before January 1, 2026,’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70118. EXTENSION OF TREATMENT OF CERTAIN INDI-
VIDUALS PERFORMING SERVICES IN THE 
SINAI PENINSULA AND ENHANCEMENT TO IN-
CLUDE ADDITIONAL AREAS. 
(a) 
TREATMENT
MADE
PERMANENT.—Section 
11026(a) of Public Law 115–97 is amended by striking ‘‘, 
with respect to the applicable period’’. 
(b) KENYA, MALI, BURKINA FASO, AND CHAD IN-
CLUDED AS HAZARDOUS DUTY AREAS.—Section 11026(b) 
of Public Law 115–97 is amended to read as follows: 
‘‘(b) QUALIFIED HAZARDOUS DUTY AREA.—For pur-
poses of this section, the term ‘qualified hazardous duty 
area’ means each of the following locations, but only during 
the period for which any member of the Armed Forces of
242 
† HR 1 EAS 
the United States is entitled to special pay under section 
310 of title 37, United States Code (relating to special pay; 
duty subject to hostile fire or imminent danger), for services 
performed in such location: 
‘‘(1) the Sinai Peninsula of Egypt. 
‘‘(2) Kenya. 
‘‘(3) Mali. 
‘‘(4) Burkina Faso. 
‘‘(5) Chad.’’. 
(c) CONFORMING
AMENDMENT.—Section 11026 of 
Public Law 115–97 is amended by striking subsections (c) 
and (d). 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on January 1, 2026. 
SEC. 70119. EXTENSION AND MODIFICATION OF EXCLUSION 
FROM GROSS INCOME OF STUDENT LOANS 
DISCHARGED ON ACCOUNT OF DEATH OR 
DISABILITY. 
(a) IN GENERAL.—Section 108(f)(5) is amended to 
read as follows: 
‘‘(5) DISCHARGES ON ACCOUNT OF DEATH OR 
DISABILITY.— 
‘‘(A) IN GENERAL.—In the case of an indi-
vidual, gross income does not include any 
amount which (but for this subsection) would be
243 
† HR 1 EAS 
includible in gross income for such taxable year 
by reason of the discharge (in whole or in part) 
of any loan described in subparagraph (B), if 
such discharge was— 
‘‘(i) pursuant to subsection (a) or (d) 
of section 437 of the Higher Education Act 
of 1965 or the parallel benefit under part D 
of title IV of such Act (relating to the re-
payment of loan liability), 
‘‘(ii) pursuant to section 464(c)(1)(F) 
of such Act, or 
‘‘(iii) otherwise discharged on account 
of death or total and permanent disability 
of the student. 
‘‘(B) LOANS DISCHARGED.—A loan is de-
scribed in this subparagraph if such loan is— 
‘‘(i) a student loan (as defined in 
paragraph (2)), or 
‘‘(ii) a private education loan (as de-
fined in section 140(a) of the Consumer 
Credit Protection Act (15 U.S.C. 1650(a)). 
‘‘(C) SOCIAL SECURITY NUMBER REQUIRE-
MENT.— 
‘‘(i) IN GENERAL.—Subparagraph (A) 
shall not apply with respect to any dis-
244 
† HR 1 EAS 
charge during any taxable year unless the 
taxpayer includes the taxpayer’s social secu-
rity number on the return of tax for such 
taxable year. 
‘‘(ii) SOCIAL SECURITY NUMBER.—For 
purposes of this subparagraph, the term ‘so-
cial security number’ has the meaning given 
such term in section 24(h)(7).’’. 
(b) OMISSION OF CORRECT SOCIAL SECURITY NUMBER 
TREATED AS MATHEMATICAL OR CLERICAL ERROR.—Sec-
tion 6213(g)(2), as amended by this Act, is further amended 
by striking ‘‘and’’ at the end of subparagraph (V), by strik-
ing the period at the end of subparagraph (W) and insert-
ing ‘‘, and’’, and by inserting after subparagraph (W) the 
following new subparagraph: 
‘‘(X) an omission of a correct social security 
number required under section 108(f)(5)(C) (re-
lating to discharges on account of death or dis-
ability).’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to discharges after December 31, 2025. 
SEC. 70120. LIMITATION ON INDIVIDUAL DEDUCTIONS FOR 
CERTAIN STATE AND LOCAL TAXES, ETC. 
(a) IN GENERAL.—Section 164(b)(6) is amended—
245 
† HR 1 EAS 
(1) by striking ‘‘and before January 1, 2026’’, 
and 
(2) by striking ‘‘$10,000 ($5,000 in the case of 
a married individual filing a separate return)’’ and 
inserting ‘‘the applicable limitation amount (half the 
applicable limitation amount in the case of a married 
individual filing a separate return)’’. 
(b) 
APPLICABLE
LIMITATION
AMOUNT.—Section 
164(b) is amended by adding at the end the following new 
paragraph: 
‘‘(7) APPLICABLE LIMITATION AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (6), the term ‘applicable limitation 
amount’ means— 
‘‘(i) in the case of any taxable year be-
ginning in calendar year 2025, $40,000, 
‘‘(ii) in the case of any taxable year 
beginning in calendar year 2026, $40,400, 
‘‘(iii) in the case of any taxable year 
beginning after calendar year 2026 and be-
fore 2030, 101 percent of the dollar amount 
in effect under this subparagraph for tax-
able years beginning in the preceding cal-
endar year, and
246 
† HR 1 EAS 
‘‘(iv) in the case of any taxable year 
beginning 
after 
calendar 
year 
2029, 
$10,000. 
‘‘(B) PHASEDOWN BASED ON MODIFIED AD-
JUSTED GROSS INCOME.— 
‘‘(i) IN GENERAL.—Except as provided 
in clause (iii), in the case of any taxable 
year beginning before January 1, 2030, the 
applicable limitation amount shall be re-
duced by 30 percent of the excess (if any) of 
the taxpayer’s modified adjusted gross in-
come over the threshold amount (half the 
threshold amount in the case of a married 
individual filing a separate return). 
‘‘(ii) THRESHOLD AMOUNT.—For pur-
poses of this subparagraph, the term ‘thresh-
old amount’ means— 
‘‘(I) in the case of any taxable 
year beginning in calendar year 2025, 
$500,000, 
‘‘(II) in the case of any taxable 
year beginning in calendar year 2026, 
$505,000, and 
‘‘(III) in the case of any taxable 
year beginning after calendar year
247 
† HR 1 EAS 
2026, 101 percent of the dollar amount 
in effect under this subparagraph for 
taxable years beginning in the pre-
ceding calendar year. 
‘‘(iii) LIMITATION
ON
REDUCTION.— 
The reduction under clause (i) shall not re-
sult in the applicable limitation amount 
being less than $10,000. 
‘‘(iv) MODIFIED ADJUSTED GROSS IN-
COME.—For purposes of this paragraph, the 
term ‘modified adjusted gross income’ 
means adjusted gross income increased by 
any amount excluded from gross income 
under section 911, 931, or 933.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2024. 
CHAPTER 
2—DELIVERING 
ON 
PRESI-
DENTIAL 
PRIORITIES 
TO 
PROVIDE 
NEW MIDDLE-CLASS TAX RELIEF 
SEC. 70201. NO TAX ON TIPS. 
(a) DEDUCTION ALLOWED.—Part VII of subchapter B 
of chapter 1 is amended by redesignating section 224 as 
section 225 and by inserting after section 223 the following 
new section:
248 
† HR 1 EAS 
‘‘SEC. 224. QUALIFIED TIPS. 
‘‘(a) IN GENERAL.—There shall be allowed as a deduc-
tion an amount equal to the qualified tips received during 
the taxable year that are included on statements furnished 
to the individual pursuant to section 6041(d)(3), 
6041A(e)(3), 6050W(f)(2), or 6051(a)(18), or reported by 
the taxpayer on Form 4137 (or successor). 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The amount allowed as a de-
duction under this section for any taxable year shall 
not exceed $25,000. 
‘‘(2) LIMITATION BASED ON ADJUSTED GROSS IN-
COME.— 
‘‘(A) IN GENERAL.—The amount allowable 
as a deduction under subsection (a) (after appli-
cation of paragraph (1)) shall be reduced (but 
not below zero) by $100 for each $1,000 by which 
the taxpayer’s modified adjusted gross income ex-
ceeds $150,000 ($300,000 in the case of a joint 
return). 
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of this paragraph, the 
term ‘modified adjusted gross income’ means the 
adjusted gross income of the taxpayer for the tax-
able year increased by any amount excluded
249 
† HR 1 EAS 
from gross income under section 911, 931, or 
933. 
‘‘(c) TIPS RECEIVED IN COURSE OF TRADE OR BUSI-
NESS.—In the case of qualified tips received by an indi-
vidual during any taxable year in the course of a trade 
or business (other than the trade or business of performing 
services as an employee) of such individual, such qualified 
tips shall be taken into account under subsection (a) only 
to the extent that the gross income for the taxpayer from 
such trade or business for such taxable year (including such 
qualified tips) exceeds the sum of the deductions (other than 
the deduction allowed under this section) allocable to the 
trade or business in which such qualified tips are received 
by the individual for such taxable year. 
‘‘(d) QUALIFIED TIPS.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘qualified tips’ 
means cash tips received by an individual in an occu-
pation which customarily and regularly received tips 
on or before December 31, 2024, as provided by the 
Secretary. 
‘‘(2) EXCLUSIONS.—Such term shall not include 
any amount received by an individual unless— 
‘‘(A) such amount is paid voluntarily with-
out any consequence in the event of nonpayment,
250 
† HR 1 EAS 
is not the subject of negotiation, and is deter-
mined by the payor, 
‘‘(B) the trade or business in the course of 
which the individual receives such amount is not 
a specified service trade or business (as defined 
in section 199A(d)(2)), and 
‘‘(C) such other requirements as may be es-
tablished by the Secretary in regulations or other 
guidance are satisfied. 
For purposes of subparagraph (B), in the case of an 
individual receiving tips in the trade or business of 
performing services as an employee, such individual 
shall be treated as receiving tips in the course of a 
trade or business which is a specified service trade or 
business if the trade or business of the employer is a 
specified service trade or business. 
‘‘(3) CASH
TIPS.—For purposes of paragraph 
(1), the term ‘cash tips’ includes tips received from 
customers that are paid in cash or charged and, in 
the case of an employee, tips received under any tip- 
sharing arrangement. 
‘‘(e) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed under this section unless the taxpayer includes
251 
† HR 1 EAS 
on the return of tax for the taxable year such individ-
ual’s social security number. 
‘‘(2) SOCIAL SECURITY NUMBER DEFINED.—For 
purposes of paragraph (1), the term ‘social security 
number’ shall have the meaning given such term in 
section 24(h)(7). 
‘‘(f) MARRIED INDIVIDUALS.—If the taxpayer is a 
married individual (within the meaning of section 7703), 
this section shall apply only if the taxpayer and the tax-
payer’s spouse file a joint return for the taxable year. 
‘‘(g) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary to 
prevent reclassification of income as qualified tips, includ-
ing regulations or other guidance to prevent abuse of the 
deduction allowed by this section. 
‘‘(h) TERMINATION.—No deduction shall be allowed 
under this section for any taxable year beginning after De-
cember 31, 2028.’’. 
(b) DEDUCTION ALLOWED TO NON-ITEMIZERS.—Sec-
tion 63(b) is amended by striking ‘‘and’’ at the end of para-
graph (3), by striking the period at the end of paragraph 
(4) and inserting ‘‘, and’’, and by adding at the end the 
following new paragraph: 
‘‘(5) the deduction provided in section 224.’’.
252 
† HR 1 EAS 
(c) OMISSION OF CORRECT SOCIAL SECURITY NUMBER 
TREATED AS MATHEMATICAL OR CLERICAL ERROR.—Sec-
tion 6213(g)(2), as amended by the preceding provisions of 
this Act, is amended by striking ‘‘and’’ at the end of sub-
paragraph (W), by striking the period at the end of sub-
paragraph (X) and inserting ‘‘, and’’, and by inserting 
after subparagraph (X) the following new subparagraph: 
‘‘(Y) an omission of a correct social security 
number required under section 224(e) (relating 
to deduction for qualified tips).’’. 
(d) EXCLUSION
FROM
QUALIFIED
BUSINESS
IN-
COME.—Section 199A(c)(4) is amended by striking ‘‘and’’ 
at the end of subparagraph (B), by striking the period at 
the end of subparagraph (C) and inserting ‘‘, and’’, and 
by adding at the end the following new subparagraph: 
‘‘(D) any amount with respect to which a 
deduction is allowable to the taxpayer under sec-
tion 224(a) for the taxable year.’’. 
(e) EXTENSION OF TIP CREDIT TO BEAUTY SERVICE 
BUSINESS.— 
(1) IN GENERAL.—Section 45B(b)(2) is amended 
to read as follows: 
‘‘(2) APPLICATION ONLY TO CERTAIN LINES OF 
BUSINESS.—In applying paragraph (1) there shall be
253 
† HR 1 EAS 
taken into account only tips received from customers 
or clients in connection with the following services: 
‘‘(A) The providing, delivering, or serving of 
food or beverages for consumption, if the tipping 
of employees delivering or serving food or bev-
erages by customers is customary. 
‘‘(B) The providing of any of the following 
services to a customer or client if the tipping of 
employees providing such services is customary: 
‘‘(i) Barbering and hair care. 
‘‘(ii) Nail care. 
‘‘(iii) Esthetics. 
‘‘(iv) Body and spa treatments.’’. 
(2) CREDIT
DETERMINED
WITH
RESPECT
TO 
MINIMUM WAGE IN EFFECT.—Section 45B(b)(1)(B) is 
amended— 
(A) by striking ‘‘as in effect on January 1, 
2007, and’’, and 
(B) by inserting ‘‘, and in the case of food 
or beverage establishments, as in effect on Janu-
ary 1, 2007’’ after ‘‘without regard to section 
3(m) of such Act’’. 
(f) REPORTING REQUIREMENTS.— 
(1) RETURNS
FOR
PAYMENTS
MADE
IN
THE 
COURSE OF A TRADE OR BUSINESS.—
254 
† HR 1 EAS 
(A) 
STATEMENT
FURNISHED
TO
SEC-
RETARY.—Section 6041(a) is amended by insert-
ing ‘‘(including a separate accounting of any 
such amounts reasonably designated as cash tips 
and the occupation described in section 224(d)(1) 
of the person receiving such tips)’’ after ‘‘such 
gains, profits, and income’’. 
(B) STATEMENT FURNISHED TO PAYEE.— 
Section 6041(d) is amended by striking ‘‘and’’ at 
the end of paragraph (1), by striking the period 
at the end of paragraph (2) and inserting ‘‘, 
and’’, and by inserting after paragraph (2) the 
following new paragraph: 
‘‘(3) in the case of compensation to non-employ-
ees, the portion of payments that have been reason-
ably designated as cash tips and the occupation de-
scribed in section 224(d)(1) of the person receiving 
such tips.’’. 
(2) RETURNS FOR PAYMENTS MADE FOR SERV-
ICES AND DIRECT SALES.— 
(A) 
STATEMENT
FURNISHED
TO
SEC-
RETARY.—Section 6041A(a) is amended by in-
serting ‘‘(including a separate accounting of any 
such amounts reasonably designated as cash tips 
and the occupation described in section 224(d)(1)
255 
† HR 1 EAS 
of the person receiving such tips)’’ after ‘‘amount 
of such payments’’. 
(B) STATEMENT FURNISHED TO PAYEE.— 
Section 6041A(e) is amended by striking ‘‘and’’ 
at the end of paragraph (1), by striking the pe-
riod at the end of paragraph (2) and inserting 
‘‘, and’’, and by inserting after paragraph (2) 
the following new paragraph: 
‘‘(3) in the case of subsection (a), the portion of 
payments that have been reasonably designated as 
cash tips and the occupation described in section 
224(d)(1) of the person receiving such tips.’’. 
(3) RETURNS RELATING TO THIRD PARTY SET-
TLEMENT ORGANIZATIONS.— 
(A) 
STATEMENT
FURNISHED
TO
SEC-
RETARY.—Section 6050W(a) is amended by 
striking ‘‘and’’ at the end of paragraph (1), by 
striking the period at the end of paragraph (2) 
and inserting ‘‘and’’, and by adding at the end 
the following new paragraph: 
‘‘(3) in the case of a third party settlement orga-
nization, the portion of reportable payment trans-
actions that have been reasonably designated by 
payors as cash tips and the occupation described in 
section 224(d)(1) of the person receiving such tips.’’.
256 
† HR 1 EAS 
(B) STATEMENT FURNISHED TO PAYEE.— 
Section 6050W(f)(2) is amended by inserting 
‘‘(including a separate accounting of any such 
amounts that have been reasonably designated by 
payors as cash tips and the occupation described 
in section 224(d)(1) of the person receiving such 
tips)’’ after ‘‘reportable payment transactions’’. 
(4) RETURNS
RELATED
TO
WAGES.—Section 
6051(a) is amended by striking ‘‘and’’ at the end of 
paragraph (16), by striking the period at the end of 
paragraph (17) and inserting ‘‘, and’’, and by insert-
ing after paragraph (17) the following new para-
graph: 
‘‘(18) the total amount of cash tips reported by 
the employee under section 6053(a) and the occupa-
tion described in section 224(d)(1) such person.’’. 
(g) CLERICAL AMENDMENT.—The table of sections for 
part VII of subchapter B of chapter 1 is amended by redes-
ignating the item relating to section 224 as relating to sec-
tion 225 and by inserting after the item relating to section 
223 the following new item: 
‘‘Sec. 224. Qualified tips.’’. 
(h) PUBLISHED LIST OF OCCUPATIONS TRADITION-
ALLY RECEIVING TIPS.—Not later than 90 days after the 
date of the enactment of this Act, the Secretary of the Treas-
ury (or the Secretary’s delegate) shall publish a list of occu-
257 
† HR 1 EAS 
pations which customarily and regularly received tips on 
or before December 31, 2024, for purposes of section 
224(d)(1) of the Internal Revenue Code of 1986 (as added 
by subsection (a)). 
(i) WITHHOLDING.—The Secretary of the Treasury (or 
the Secretary’s delegate) shall modify the procedures pre-
scribed under section 3402(a) of the Internal Revenue Code 
of 1986 for taxable years beginning after December 31, 
2025, to take into account the deduction allowed under sec-
tion 224 of such Code (as added by this Act). 
(j) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2024. 
(k) TRANSITION RULE.—In the case of any cash tips 
required to be reported for periods before January 1, 2026, 
persons required to file returns or statements under section 
6041(a), 6041(d)(3), 6041A(a), 6041A(e)(3), 6050W(a), or 
6050W(f)(2) of the Internal Revenue Code of 1986 (as 
amended by this section) may approximate a separate ac-
counting of amounts designated as cash tips by any reason-
able method specified by the Secretary. 
SEC. 70202. NO TAX ON OVERTIME. 
(a) DEDUCTION ALLOWED.—Part VII of subchapter B 
of chapter 1, as amended by the preceding provisions of this
258 
† HR 1 EAS 
Act, is amended by redesignating section 225 as section 226 
and by inserting after section 224 the following new section: 
‘‘SEC. 225. QUALIFIED OVERTIME COMPENSATION. 
‘‘(a) IN GENERAL.—There shall be allowed as a deduc-
tion an amount equal to the qualified overtime compensa-
tion received during the taxable year and included on state-
ments furnished to the individual pursuant to section 
6041(d)(4) or 6051(a)(19). 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The amount allowed as a de-
duction under this section for any taxable year shall 
not exceed $12,500 ($25,000 in the case of a joint re-
turn). 
‘‘(2) LIMITATION BASED ON ADJUSTED GROSS IN-
COME.— 
‘‘(A) IN GENERAL.—The amount allowable 
as a deduction under subsection (a) (after appli-
cation of paragraph (1)) shall be reduced (but 
not below zero) by $100 for each $1,000 by which 
the taxpayer’s modified adjusted gross income ex-
ceeds $150,000 ($300,000 in the case of a joint 
return). 
‘‘(B) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of this paragraph, the 
term ‘modified adjusted gross income’ means the
259 
† HR 1 EAS 
adjusted gross income of the taxpayer for the tax-
able year increased by any amount excluded 
from gross income under section 911, 931, or 
933. 
‘‘(c) QUALIFIED OVERTIME COMPENSATION.— 
‘‘(1) IN GENERAL.—For purposes of this section, 
the term ‘qualified overtime compensation’ means 
overtime compensation paid to an individual re-
quired under section 7 of the Fair Labor Standards 
Act of 1938 that is in excess of the regular rate (as 
used in such section) at which such individual is em-
ployed. 
‘‘(2) EXCLUSIONS.—Such term shall not include 
any qualified tip (as defined in section 224(d)). 
‘‘(d) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed under this section unless the taxpayer includes 
on the return of tax for the taxable year such individ-
ual’s social security number. 
‘‘(2) SOCIAL SECURITY NUMBER DEFINED.—For 
purposes of paragraph (1), the term ‘social security 
number’ shall have the meaning given such term in 
section 24(h)(7). 
‘‘(e) MARRIED INDIVIDUALS.—If the taxpayer is a 
married individual (within the meaning of section 7703),
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† HR 1 EAS 
this section shall apply only if the taxpayer and the tax-
payer’s spouse file a joint return for the taxable year. 
‘‘(f) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or appro-
priate to carry out the purposes of this section, including 
regulations or other guidance to prevent abuse of the deduc-
tion allowed by this section. 
‘‘(g) TERMINATION.—No deduction shall be allowed 
under this section for any taxable year beginning after De-
cember 31, 2028.’’. 
(b) DEDUCTION ALLOWED TO NON-ITEMIZERS.—Sec-
tion 63(b), as amended by the preceding provisions of this 
Act, is amended by striking ‘‘and’’ at the end of paragraph 
(4), by striking the period at the end of paragraph (5) and 
inserting ‘‘, and’’, and by adding at the end the following 
new paragraph: 
‘‘(6) the deduction provided in section 225.’’. 
(c) REPORTING.— 
(1) REQUIREMENT TO INCLUDE OVERTIME COM-
PENSATION ON W-2.—Section 6051(a), as amended by 
the preceding provision of this Act, is amended by 
striking ‘‘and’’ at the end of paragraph (17), by strik-
ing the period at the end of paragraph (18) and in-
serting ‘‘, and’’, and by inserting after paragraph 
(18) the following new paragraph:
261 
† HR 1 EAS 
‘‘(19) the total amount of qualified overtime 
compensation (as defined in section 225(c)).’’. 
(2) PAYMENTS TO PERSONS NOT TREATED AS 
EMPLOYEES UNDER TAX LAWS.— 
(A) 
STATEMENT
FURNISHED
TO
SEC-
RETARY.—Section 6041(a), as amended by sec-
tion 70201(e)(1)(A), is amended by inserting 
‘‘and a separate accounting of any amount of 
qualified overtime compensation (as defined in 
section 225(c))’’ after ‘‘occupation of the person 
receiving such tips’’. 
(B) STATEMENT FURNISHED TO PAYEE.— 
Section 
6041(d), 
as 
amended 
by 
section 
70201(e)(1)(B), is amended by striking ‘‘and’’ at 
the end of paragraph (2), by striking the period 
at the end of paragraph (3) and inserting ‘‘, 
and’’, and by inserting after paragraph (3) the 
following new paragraph: 
‘‘(4) the portion of payments that are qualified 
overtime 
compensation 
(as 
defined 
in 
section 
225(c)).’’. 
(d) OMISSION OF CORRECT SOCIAL SECURITY NUM-
BER TREATED AS MATHEMATICAL OR CLERICAL ERROR.— 
Section 6213(g)(2), as amended by the preceding provisions 
of this Act, is amended by striking ‘‘and’’ at the end of
262 
† HR 1 EAS 
subparagraph (X), by striking the period at the end of sub-
paragraph (Y) and inserting ‘‘, and’’, and by inserting 
after subparagraph (Y) the following new subparagraph: 
‘‘(Z) an omission of a correct social security 
number required under section 225(d) (relating 
to deduction for qualified overtime).’’. 
(e) CLERICAL AMENDMENT.—The table of sections for 
part VII of subchapter B of chapter 1, as amended by the 
preceding provisions of this Act, is amended by redesig-
nating the item relating to section 225 as an item relating 
to section 226 and by inserting after the item relating to 
section 224 the following new item: 
‘‘Sec. 225. Qualified overtime compensation.’’. 
(f) WITHHOLDING.—The Secretary of the Treasury (or 
the Secretary’s delegate) shall modify the procedures pre-
scribed under section 3402(a) of the Internal Revenue Code 
of 1986 for taxable years beginning after December 31, 
2025, to take into account the deduction allowed under sec-
tion 225 of such Code (as added by this Act). 
(g) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2024. 
(h) TRANSITION RULE.—In the case of qualified over-
time compensation required to be reported for periods before 
January 1, 2026, persons required to file returns or state-
ments under section 6051(a)(19), 6041(a), or 6041(d)(4) of
263 
† HR 1 EAS 
the Internal Revenue Code of 1986 (as amended by this sec-
tion) may approximate a separate accounting of amounts 
designated as qualified overtime compensation by any rea-
sonable method specified by the Secretary. 
SEC. 70203. NO TAX ON CAR LOAN INTEREST. 
(a) IN GENERAL.—Section 163(h) is amended by re-
designating paragraph (4) as paragraph (5) and by insert-
ing after paragraph (3) the following new paragraph: 
‘‘(4) SPECIAL RULES FOR TAXABLE YEARS 2025 
THROUGH 2028 RELATING TO QUALIFIED PASSENGER 
VEHICLE LOAN INTEREST.— 
‘‘(A) IN GENERAL.—In the case of taxable 
years beginning after December 31, 2024, and 
before January 1, 2029, for purposes of this sub-
section the term ‘personal interest’ shall not in-
clude qualified passenger vehicle loan interest. 
‘‘(B) QUALIFIED PASSENGER VEHICLE LOAN 
INTEREST DEFINED.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the term ‘qualified pas-
senger vehicle loan interest’ means any in-
terest which is paid or accrued during the 
taxable year on indebtedness incurred by 
the taxpayer after December 31, 2024, for 
the purchase of, and that is secured by a
264 
† HR 1 EAS 
first lien on, an applicable passenger vehicle 
for personal use. 
‘‘(ii) EXCEPTIONS.—Such term shall 
not include any amount paid or incurred 
on any of the following: 
‘‘(I) A loan to finance fleet sales. 
‘‘(II) A loan incurred for the pur-
chase of a commercial vehicle that is 
not used for personal purposes. 
‘‘(III) Any lease financing. 
‘‘(IV) A loan to finance the pur-
chase of a vehicle with a salvage title. 
‘‘(V) A loan to finance the pur-
chase of a vehicle intended to be used 
for scrap or parts. 
‘‘(iii) 
VIN 
REQUIREMENT.—Interest 
shall not be treated as qualified passenger 
vehicle loan interest under this paragraph 
unless the taxpayer includes the vehicle 
identification number of the applicable pas-
senger vehicle described in clause (i) on the 
return of tax for the taxable year. 
‘‘(C) LIMITATIONS.— 
‘‘(i) DOLLAR LIMIT.—The amount of 
interest taken into account by a taxpayer
265 
† HR 1 EAS 
under subparagraph (B) for any taxable 
year shall not exceed $10,000. 
‘‘(ii) LIMITATION BASED ON MODIFIED 
ADJUSTED GROSS INCOME.— 
‘‘(I) IN
GENERAL.—The amount 
which is otherwise allowable as a de-
duction under subsection (a) as quali-
fied passenger vehicle loan interest (de-
termined without regard to this clause 
and after the application of clause (i)) 
shall be reduced (but not below zero) by 
$200 for each $1,000 (or portion there-
of) by which the modified adjusted 
gross income of the taxpayer for the 
taxable 
year 
exceeds 
$100,000 
($200,000 in the case of a joint re-
turn). 
‘‘(II) MODIFIED ADJUSTED GROSS 
INCOME.—For purposes of this clause, 
the term ‘modified adjusted gross in-
come’ means the adjusted gross income 
of the taxpayer for the taxable year in-
creased by any amount excluded from 
gross income under section 911, 931, or 
933.
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† HR 1 EAS 
‘‘(D) APPLICABLE PASSENGER VEHICLE.— 
The term ‘applicable passenger vehicle’ means 
any vehicle— 
‘‘(i) the original use of which com-
mences with the taxpayer, 
‘‘(ii) which is manufactured primarily 
for use on public streets, roads, and high-
ways (not including a vehicle operated ex-
clusively on a rail or rails), 
‘‘(iii) which has at least 2 wheels, 
‘‘(iv) which is a car, minivan, van, 
sport utility vehicle, pickup truck, or motor-
cycle, 
‘‘(v) which is treated as a motor vehi-
cle for purposes of title II of the Clean Air 
Act, and 
‘‘(vi) which has a gross vehicle weight 
rating of less than 14,000 pounds. 
Such term shall not include any vehicle the final 
assembly of which did not occur within the 
United States. 
‘‘(E) OTHER
DEFINITIONS
AND
SPECIAL 
RULES.—For purposes of this paragraph— 
‘‘(i) FINAL ASSEMBLY.—For purposes 
of subparagraph (D), the term ‘final assem-
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† HR 1 EAS 
bly’ means the process by which a manufac-
turer produces a vehicle at, or through the 
use of, a plant, factory, or other place from 
which the vehicle is delivered to a dealer 
with all component parts necessary for the 
mechanical operation of the vehicle included 
with the vehicle, whether or not the compo-
nent parts are permanently installed in or 
on the vehicle. 
‘‘(ii) TREATMENT OF REFINANCING.— 
Indebtedness described in subparagraph (B) 
shall include indebtedness that results from 
refinancing any indebtedness described in 
such subparagraph, and that is secured by 
a first lien on the applicable passenger vehi-
cle with respect to which the refinanced in-
debtedness was incurred, but only to the ex-
tent the amount of such resulting indebted-
ness does not exceed the amount of such refi-
nanced indebtedness. 
‘‘(iii) RELATED
PARTIES.—Indebted-
ness described in subparagraph (B) shall 
not include any indebtedness owed to a per-
son who is related (within the meaning of
268 
† HR 1 EAS 
section 267(b) or 707(b)(1)) to the tax-
payer.’’. 
(b) DEDUCTION ALLOWED TO NON-ITEMIZERS.—Sec-
tion 63(b), as amended by the preceding provisions of this 
Act, is amended by striking ‘‘and’’ at the end of paragraph 
(5), by striking the period at the end of paragraph (6) and 
inserting ‘‘and’’, and by adding at the end the following 
new paragraph: 
‘‘(7) so much of the deduction allowed by section 
163(a) as is attributable to the exception under sec-
tion 163(h)(4)(A).’’. 
(c) REPORTING.— 
(1) IN GENERAL.—Subpart B of part III of sub-
chapter A of chapter 61 is amended by adding at the 
end the following new section: 
‘‘SEC. 6050AA. RETURNS RELATING TO APPLICABLE PAS-
SENGER VEHICLE LOAN INTEREST RECEIVED 
IN TRADE OR BUSINESS FROM INDIVIDUALS. 
‘‘(a) IN GENERAL.—Any person— 
‘‘(1) who is engaged in a trade or business, and 
‘‘(2) who, in the course of such trade or business, 
receives from any individual interest aggregating 
$600 or more for any calendar year on a specified 
passenger vehicle loan,
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† HR 1 EAS 
shall make the return described in subsection (b) with re-
spect to each individual from whom such interest was re-
ceived at such time as the Secretary may provide. 
‘‘(b) FORM AND MANNER OF RETURNS.—A return is 
described in this subsection if such return— 
‘‘(1) is in such form as the Secretary may pre-
scribe, and 
‘‘(2) contains— 
‘‘(A) the name and address of the indi-
vidual from whom the interest described in sub-
section (a)(2) was received, 
‘‘(B) the amount of such interest received 
for the calendar year, 
‘‘(C) the amount of outstanding principal 
on the specified passenger vehicle loan as of the 
beginning of such calendar year, 
‘‘(D) the date of the origination of such 
loan, 
‘‘(E) the year, make, model, and vehicle 
identification number of the applicable passenger 
vehicle which secures such loan (or such other de-
scription of such vehicle as the Secretary may 
prescribe), and 
‘‘(F) such other information as the Sec-
retary may prescribe.
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† HR 1 EAS 
‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVIDUALS 
WITH RESPECT TO WHOM INFORMATION IS REQUIRED.— 
Every person required to make a return under subsection 
(a) shall furnish to each individual whose name is required 
to be set forth in such return a written statement showing— 
‘‘(1) the name, address, and phone number of the 
information contact of the person required to make 
such return, and 
‘‘(2) the information described in subparagraphs 
(B), (C), (D), and (E) of subsection (b)(2) with re-
spect to such individual (and such information as is 
described in subsection (b)(2)(F) with respect to such 
individual as the Secretary may provide for purposes 
of this subsection). 
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the year 
following the calendar year for which the return under sub-
section (a) was required to be made. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) IN GENERAL.—Terms used in this section 
which are also used in paragraph (4) of section 
163(h) shall have the same meaning as when used in 
such paragraph. 
‘‘(2) SPECIFIED
PASSENGER
VEHICLE
LOAN.— 
The term ‘specified passenger vehicle loan’ means the
271 
† HR 1 EAS 
indebtedness described in section 163(h)(4)(B) with 
respect to any applicable passenger vehicle. 
‘‘(e) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or appro-
priate to carry out the purposes of this section, including 
regulations or other guidance to prevent the duplicate re-
porting of information under this section. 
‘‘(f) APPLICABILITY.—No return shall be required 
under this section for any period to which section 163(h)(4) 
does not apply.’’. 
(2) PENALTIES.—Section 6724(d) is amended— 
(A) in paragraph (1)(B), by striking ‘‘or’’ 
at the end of clause (xxvii), by striking ‘‘and’’ at 
the end of clause (xxviii) and inserting ‘‘or’’, and 
by adding at the end the following new clause: 
‘‘(xxix) section 6050AA(a) (relating to 
returns relating to applicable passenger ve-
hicle loan interest received in trade or busi-
ness from individuals),’’, and 
(B) in paragraph (2), by striking ‘‘or’’ at 
the end of subparagraph (KK), by striking the 
period at the end of subparagraph (LL) and in-
serting ‘‘, or’’, and by inserting after subpara-
graph (LL) the following new subparagraph:
272 
† HR 1 EAS 
‘‘(MM) section 6050AA(c) (relating to state-
ments relating to applicable passenger vehicle 
loan interest received in trade or business from 
individuals).’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 56(e)(1)(B) is amended by striking 
‘‘section 163(h)(4)’’ and inserting ‘‘section 163(h)(5)’’. 
(2) The table of sections for subpart B of part 
III of subchapter A of chapter 61 is amended by add-
ing at the end the following new item: 
‘‘Sec. 6050AA. Returns relating to applicable passenger vehicle loan interest re-
ceived in trade or business from individuals.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to indebtedness incurred after December 
31, 2024. 
SEC. 70204. TRUMP ACCOUNTS AND CONTRIBUTION PILOT 
PROGRAM. 
(a) TRUMP ACCOUNTS.— 
(1) IN GENERAL.—Subchapter F of chapter 1 is 
amended by adding at the end the following new part: 
‘‘PART IX—TRUMP ACCOUNTS 
‘‘Sec. 530A. Trump accounts. 
‘‘SEC. 530A. TRUMP ACCOUNTS. 
‘‘(a) GENERAL RULE.—Except as provided in this sec-
tion or under regulations or guidance established by the 
Secretary, a Trump account shall be treated for purposes
273 
† HR 1 EAS 
of this title in the same manner as an individual retirement 
account under section 408(a). 
‘‘(b) TRUMP ACCOUNT.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘Trump account’ 
means an individual retirement account (as defined 
in section 408(a)) which is not designated as a Roth 
IRA and which meets the following requirements: 
‘‘(A) The account— 
‘‘(i) is created or organized by the Sec-
retary for the exclusive benefit of an eligible 
individual or such eligible individual’s 
beneficiaries, or 
‘‘(ii) is— 
‘‘(I) created or organized in the 
United States for the exclusive benefit 
of an individual who has not attained 
the age of 18 before the end of the cal-
endar year, or such individual’s bene-
ficiaries, and 
‘‘(II) funded by a qualified roll-
over contribution. 
‘‘(B) The account is designated (in such 
manner as the Secretary shall prescribe) at the 
time of the establishment of the account as a 
Trump account.
274 
† HR 1 EAS 
‘‘(C) The written governing instrument cre-
ating the account meets the following require-
ments: 
‘‘(i) No contribution will be accepted— 
‘‘(I) before the date that is 12 
months after the date of the enactment 
of this section, or 
‘‘(II) in the case of a contribution 
made in any calendar year before the 
calendar year in which the account 
beneficiary attains age 18, if such con-
tribution would result in aggregate 
contributions (other than exempt con-
tributions) for such calendar year in 
excess of the contribution limit speci-
fied in subsection (c)(2)(A). 
‘‘(ii) Except as provided in subsection 
(d), no distribution will be allowed before 
the first day of the calendar year in which 
the account beneficiary attains age 18. 
‘‘(iii) No part of the account funds will 
be invested in any asset other than an eligi-
ble investment during any period before the 
first day of the calendar year in which the 
account beneficiary attains age 18.
275 
† HR 1 EAS 
‘‘(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible 
individual’ means any individual— 
‘‘(A) who has not attained the age of 18 be-
fore the close of the calendar year in which the 
election under subparagraph (C) is made, 
‘‘(B) for whom a social security number 
(within the meaning of section 24(h)(7)) has 
been issued before the date on which an election 
under subsection (C) is made, and 
‘‘(C) for whom— 
‘‘(i) an election is made under this 
subparagraph by the Secretary if the Sec-
retary determines (based on information 
available to the Secretary from tax returns 
or otherwise) that such individual meets the 
requirements of subparagraphs (A) and (B) 
and no prior election has been made for 
such individual under clause (ii), or 
‘‘(ii) an election is made under this 
subparagraph by a person other than the 
Secretary (at such time and in such man-
ner as the Secretary may prescribe) for the 
establishment of a Trump account if no 
prior election has been made for such indi-
vidual under clause (i).
276 
† HR 1 EAS 
‘‘(3) ELIGIBLE INVESTMENT.— 
‘‘(A) IN GENERAL.—The term ‘eligible in-
vestment’ means any mutual fund or exchange 
traded fund which— 
‘‘(i) tracks the returns of a qualified 
index, 
‘‘(ii) does not use leverage, 
‘‘(iii) does not have annual fees and 
expenses of more than 0.1 percent of the bal-
ance of the investment in the fund, and 
‘‘(iv) meets such other criteria as the 
Secretary determines appropriate for pur-
poses of this section. 
‘‘(B) QUALIFIED INDEX.—The term ‘quali-
fied index’ means— 
‘‘(i) the Standard and Poor’s 500 stock 
market index, or 
‘‘(ii) any other index— 
‘‘(I) which is comprised of equity 
investments 
in 
primarily 
United 
States companies, and 
‘‘(II) for which regulated futures 
contracts 
(as 
defined 
in 
section 
1256(g)(1)) are traded on a qualified
277 
† HR 1 EAS 
board or exchange (as defined in sec-
tion 1256(g)(7)). 
Such term shall not include any industry or 
sector-specific index, but may include an 
index based on market capitalization. 
‘‘(4) ACCOUNT BENEFICIARY.—The term ‘account 
beneficiary’ means the individual on whose behalf the 
Trump account was established. 
‘‘(c) TREATMENT OF CONTRIBUTIONS.— 
‘‘(1) NO DEDUCTION ALLOWED.—No deduction 
shall be allowed under section 219 for any contribu-
tion which is made before the first day of the calendar 
year in which the account beneficiary attains age 18. 
‘‘(2) CONTRIBUTION LIMIT.—In the case of any 
contribution made before the calendar year in which 
the account beneficiary attains age 18— 
‘‘(A) IN GENERAL.—The aggregate amount 
of contributions (other than exempt contribu-
tions) for such calendar year shall not exceed 
$5,000. 
‘‘(B) EXEMPT
CONTRIBUTION.—For pur-
poses of this paragraph, the term ‘exempt con-
tribution’ means— 
‘‘(i) a qualified rollover contribution,
278 
† HR 1 EAS 
‘‘(ii) any qualified general contribu-
tion, or 
‘‘(iii) any contribution provided under 
section 6434. 
‘‘(C) COST-OF-LIVING ADJUSTMENT.— 
‘‘(i) IN GENERAL.—In the case of any 
taxable year after 2027, the $5,000 amount 
under subparagraph (A) shall be increased 
by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied 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 
‘calendar year 2026’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘(ii) 
ROUNDING.—If 
any 
increase 
under this subparagraph is not a multiple 
of $100, such amount shall be rounded to 
the next lowest multiple of $100. 
‘‘(3) 
TIMING
OF
CONTRIBUTIONS.—Section 
219(f)(3) shall not apply to any contribution made to 
a Trump account for any taxable year ending before
279 
† HR 1 EAS 
the calendar year in which the account beneficiary at-
tains age 18. 
‘‘(d) DISTRIBUTIONS.— 
‘‘(1) IN GENERAL.—Except as otherwise provided 
in this subsection, no distribution shall be allowed be-
fore the first day of the calendar year in which the 
account beneficiary attains age 18. 
‘‘(2) TAX TREATMENT OF ALLOWABLE DISTRIBU-
TIONS.—For purposes of applying section 72 to any 
amount distributed from a Trump account, the in-
vestment in the contract shall not include— 
‘‘(A) any qualified general contribution, 
‘‘(B) any contribution provided under sec-
tion 6434, and 
‘‘(C) the amount of any contribution which 
is excluded from gross income under section 128. 
‘‘(3) QUALIFIED
ROLLOVER
CONTRIBUTIONS.— 
Paragraph (1) shall not apply to any distribution 
which is a qualified rollover contribution and the 
amount of such distribution shall not be included in 
the gross income of the beneficiary. 
‘‘(4) QUALIFIED
ABLE
ROLLOVER
CONTRIBU-
TIONS.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to any distribution which is a quali-
280 
† HR 1 EAS 
fied ABLE rollover contribution and the amount 
of such distribution shall not be included in the 
gross income of the beneficiary. 
‘‘(B) QUALIFIED
ABLE
ROLLOVER
CON-
TRIBUTION.—For purposes of this section, the 
term ‘qualified ABLE rollover contribution’ 
means an amount which is paid during the cal-
endar year in which the account beneficiary at-
tains age 17 in a direct trustee-to-trustee trans-
fer from a Trump account maintained for the 
benefit of the account beneficiary to an ABLE 
account (as defined in section 529A(e)(6)) for the 
benefit of the such account beneficiary, but only 
if the amount of such payment is equal to the en-
tire balance of the Trump account from which 
the payment is made. 
‘‘(5) DISTRIBUTIONS
OF
EXCESS
CONTRIBU-
TIONS.—In the case of any contribution which is 
made before the calendar year in which the account 
beneficiary attains age 18 and which is in excess of 
the limitation in effect under subsection (c)(2)(A) for 
the calendar year— 
‘‘(A) paragraph (1) shall not apply to the 
distribution of such excess,
281 
† HR 1 EAS 
‘‘(B) the amount of such distribution shall 
not be included in gross income of the account 
beneficiary, and 
‘‘(C) the tax imposed by this chapter on the 
distributee for the taxable year in which the dis-
tribution is made shall be increased by 100 per-
cent of the amount of net income attributable to 
such excess (determined without regard to sub-
paragraph (B)). 
‘‘(6) TREATMENT OF DEATH OF ACCOUNT BENE-
FICIARY.—If, by reason of the death of the account 
beneficiary before the first day of the calendar year 
in which the account beneficiary attains age 18, any 
person acquires the account beneficiary’s interest in 
the Trump account— 
‘‘(A) paragraph (1) shall not apply, 
‘‘(B) such account shall cease to be a Trump 
account as of the date of death, and 
‘‘(C) an amount equal to the fair market 
value of the assets (reduced by the investment in 
the contract) in such account on such date 
shall— 
‘‘(i) if such person is not the estate of 
such beneficiary, be includible in such per-
282 
† HR 1 EAS 
son’s gross income for the taxable year 
which includes such date, or 
‘‘(ii) if such person is the estate of such 
beneficiary, be includible in such bene-
ficiary’s gross income for the last taxable 
year of such beneficiary. 
‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For pur-
poses of this section, the term ‘qualified rollover contribu-
tion’ means an amount which is paid in a direct trustee- 
to-trustee transfer from a Trump account maintained for 
the benefit of the account beneficiary to a Trump account 
maintained for such beneficiary, but only if the amount of 
such payment is equal to the entire balance of the Trump 
account from which the payment is made. 
‘‘(f) QUALIFIED GENERAL CONTRIBUTION.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified general 
contribution’ means any contribution which— 
‘‘(A) is made by the Secretary pursuant to 
a general funding contribution, 
‘‘(B) is made to the Trump account of an 
account beneficiary in the qualified class of ac-
count beneficiaries specified in the general fund-
ing contribution, and
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† HR 1 EAS 
‘‘(C) is in an amount which is equal to the 
ratio of— 
‘‘(i) the amount of such general fund-
ing contribution, to 
‘‘(ii) the number of account bene-
ficiaries in such qualified class. 
‘‘(2) GENERAL
FUNDING
CONTRIBUTION.—The 
term ‘general funding contribution’ means a contribu-
tion which— 
‘‘(A) is made by— 
‘‘(i) an entity described in section 
170(c)(1) (other than a possession of the 
United States or a political subdivision 
thereof) or an Indian tribal government, or 
‘‘(ii) an organization described in sec-
tion 501(c)(3) and exempt from tax under 
section 501(a), and 
‘‘(B) which specifies a qualified class of ac-
count beneficiaries to whom such contribution is 
to be distributed. 
‘‘(3) QUALIFIED CLASS.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
class’ means any of the following: 
‘‘(i) All account beneficiaries who have 
not attained the age of 18 before the close of
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† HR 1 EAS 
the calendar year in which the contribution 
is made. 
‘‘(ii) All account beneficiaries who 
have not attained the age of 18 before the 
close of the calendar year in which the con-
tribution is made and who reside in one or 
more States or other qualified geographic 
areas specified by the terms of the general 
funding contribution. 
‘‘(iii) All account beneficiaries who 
have not attained the age of 18 before the 
close of the calendar year in which the con-
tribution is made and who were born in one 
or more calendar years specified by the 
terms of the general funding contribution. 
‘‘(B) QUALIFIED GEOGRAPHIC AREA.—The 
term ‘qualified geographic area’ means any geo-
graphic area in which not less than 5,000 ac-
count beneficiaries reside and which is des-
ignated by the Secretary as a qualified geo-
graphic area under this subparagraph. 
‘‘(g) TRUSTEE SELECTION.—In the case of any Trump 
account created or organized by the Secretary, the Secretary 
shall take into account the following criteria in selecting 
the trustee:
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† HR 1 EAS 
‘‘(1) The history of reliability and regulatory 
compliance of the trustee. 
‘‘(2) The customer service experience of the trust-
ee. 
‘‘(3) The costs imposed by the trustee on the ac-
count or the account beneficiary. 
‘‘(h) OTHER SPECIAL RULES
AND COORDINATION 
WITH INDIVIDUAL RETIREMENT ACCOUNT RULES.— 
‘‘(1) IN GENERAL.—The rules of subsections (k) 
and (p) of section 408 shall not apply to a Trump 
account, and the rules of subsections (d) and (i) of 
section 408 shall not apply to a Trump account for 
any taxable year beginning before the calendar year 
in which the account beneficiary attains age 18. 
‘‘(2) CUSTODIAL ACCOUNTS.—In the case of a 
Trump account, section 408(h) shall be applied by 
substituting ‘a Trump account described in section 
530A(b)(1)’ for ‘an individual retirement account de-
scribed in subsection (a)’. 
‘‘(3) CONTRIBUTIONS.—In the case of any tax-
able year beginning before the first day of the cal-
endar year in which the account beneficiary attains 
age 18, a contribution to a Trump account shall not 
be taken into account in applying any contribution
286 
† HR 1 EAS 
limit to any individual retirement plan other than a 
Trump account. 
‘‘(4) DISTRIBUTIONS.—Section 408(d)(2) shall be 
applied separately with respect to Trump Accounts 
and other individual retirement plans. 
‘‘(5) EXCESS CONTRIBUTIONS.—For purposes of 
applying section 4973(b) to a Trump account for any 
taxable year beginning before the first day of the cal-
endar year in which the account beneficiary attains 
age 18, the term ‘excess contributions’ means the sum 
of— 
‘‘(A) the amount by which the amount con-
tributed to the account for the calendar year in 
which taxable year begins exceeds the amount 
permitted to be contributed to the account under 
subsection (c)(2), and 
‘‘(B) the amount determined under this 
paragraph for the preceding taxable year. 
For purposes of this paragraph, the excess contribu-
tions for a taxable year are reduced by the distribu-
tions to which subsection (d)(5) applies that are made 
during the taxable year or by the date prescribed by 
law (including extensions of time) for filing the ac-
count beneficiary’s return for the taxable year. 
‘‘(i) REPORTS.—
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† HR 1 EAS 
‘‘(1) IN GENERAL.—The trustee of a Trump ac-
count shall make such reports regarding such account 
to the Secretary and to the beneficiary of the account 
at such time and in such manner as may be required 
by the Secretary. Such reports shall include informa-
tion with respect to— 
‘‘(A) contributions (including the amount 
and source of any contribution in excess of $25 
made from a person other than the Secretary, the 
account beneficiary, or the parent or legal guard-
ian of the account beneficiary), 
‘‘(B) distributions (including distributions 
which are qualified rollover contributions), 
‘‘(C) the fair market value of the account, 
‘‘(D) the investment in the contract with re-
spect to such account, and 
‘‘(E) such other matters as the Secretary 
may require. 
‘‘(2) QUALIFIED
ROLLOVER
CONTRIBUTIONS.— 
Not later than 30 days after the date of any qualified 
rollover contribution, the trustee of the Trump ac-
count to which the contribution was made shall make 
a report to the Secretary. Such report shall include— 
‘‘(A) the name, address, and social security 
number of the account beneficiary,
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† HR 1 EAS 
‘‘(B) the name and address of such trustee, 
‘‘(C) the account number, 
‘‘(D) the routing number of the trustee, and 
‘‘(E) such other information as the Sec-
retary may require. 
‘‘(3) PERIOD
OF
REPORTING.—This subsection 
shall not apply to any period after the calendar year 
in which the beneficiary attains age 17.’’. 
(2) QUALIFIED ABLE ROLLOVER CONTRIBUTIONS 
EXEMPT FROM ABLE CONTRIBUTION LIMITATION.— 
(A) IN GENERAL.—Section 529A(b)(2)(B) is 
amended by inserting ‘‘or received in a qualified 
ABLE rollover contribution described in section 
530A(d)(4)(B)’’ after ‘‘except as provided in the 
case of contributions under subsection (c)(1)(C)’’. 
(B) PROHIBITION
ON
EXCESS
CONTRIBU-
TIONS.—The 
second 
sentence 
of 
section 
529A(b)(6) is amended by inserting ‘‘but do not 
include any contributions received in a qualified 
ABLE rollover contribution described in section 
530A(d)(4)(B)’’ before the period at the end. 
(C) 
CONFORMING
AMENDMENT.—Section 
4973(h)(1) is amended by inserting ‘‘or contribu-
tions received in a qualified ABLE rollover con-
tribution described in section 530A(d)(4)(B)’’
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† HR 1 EAS 
after ‘‘other than contributions under section 
529A(c)(1)(C)’’. 
(3) FAILURE TO PROVIDE REPORTS ON TRUMP 
ACCOUNTS.—Section 6693(a)(2) is amended by strik-
ing ‘‘and’’ at the end of subparagraph (E), by strik-
ing the period at the end of subparagraph (F) and in-
serting ‘‘, and’’, and by inserting after subparagraph 
(F) the following new subparagraph: 
‘‘(G) section 530A(i) (relating to Trump ac-
counts).’’. 
(4) CLERICAL AMENDMENT.— 
(A) The table of parts for subchapter F of 
chapter 1 is amended by adding at the end the 
following new item: 
‘‘PART IX—TRUMP ACCOUNTS’’. 
(b) EMPLOYER CONTRIBUTIONS.— 
(1) IN GENERAL.—Part III of subchapter B of 
chapter 1 is amended by inserting after section 127 
the following new section: 
‘‘SEC. 128. EMPLOYER CONTRIBUTIONS TO TRUMP AC-
COUNTS. 
‘‘(a) IN GENERAL.—Gross income of an employee does 
not include amounts paid by the employer as a contribution 
to the Trump account of such employee or of any dependent 
of such employee if the amounts are paid or incurred pursu-
ant to a program which is described in subsection (c).
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† HR 1 EAS 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The amount which may be 
excluded under subsection (a) with respect to any em-
ployee shall not exceed $2,500. 
‘‘(2) INFLATION ADJUSTMENT.— 
‘‘(A) IN GENERAL.—In the case of any tax-
able year beginning after 2027, the $2,500 
amount in paragraph (1) shall be increased by 
an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year begins 
by substituting ‘calendar year 2026’ for 
‘calendar year 2016’ in subparagraph 
(A)(ii) thereof. 
‘‘(B) ROUNDING.—If any increase deter-
mined under subparagraph (A) is not a multiple 
of $100, such increase shall be rounded to the 
next lowest multiple of $100. 
‘‘(c) TRUMP ACCOUNT CONTRIBUTION PROGRAM.—For 
purposes of this section, a Trump account contribution pro-
gram is a separate written plan of an employer for the ex-
clusive benefit of his employees to provide contributions to 
the Trump accounts of such employees or dependents of such
291 
† HR 1 EAS 
employees which meets requirements similar to the require-
ments of paragraphs (2), (3), (6), (7), and (8) of section 
129(d).’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part III of subchapter B of chapter 1 is 
amended by inserting after the item relating to sec-
tion 127 the following new item: 
‘‘Sec. 128. Employer contributions to Trump accounts.’’. 
(c) CERTAIN CONTRIBUTIONS EXCLUDED FROM GROSS 
INCOME.— 
(1) IN GENERAL.—Part III of subchapter B of 
chapter 1 is amended by inserting before section 140 
the following new section: 
‘‘SEC. 139J. CERTAIN CONTRIBUTIONS TO TRUMP AC-
COUNTS. 
‘‘(a) IN GENERAL.—Gross income of an account bene-
ficiary shall not include any qualified general contribution 
to a Trump account of the account beneficiary. 
‘‘(b) DEFINITIONS.—Any term used in this section 
which is used in section 530A shall have the meaning given 
such term under section 530A.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for part III of subchapter B is amended by in-
serting before the item relating to section 140 the fol-
lowing new item: 
‘‘Sec. 139J. Certain contributions to Trump accounts.’’.
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† HR 1 EAS 
(d) TRUMP ACCOUNTS CONTRIBUTION PILOT PRO-
GRAM.— 
(1) IN GENERAL.—Subchapter B of chapter 65 is 
amended by adding at the end the following new sec-
tion: 
‘‘SEC. 6434. TRUMP ACCOUNTS CONTRIBUTION PILOT PRO-
GRAM. 
‘‘(a) IN GENERAL.—In the case of an individual who 
makes an election under this section with respect to an eli-
gible child of the individual, such eligible child shall be 
treated as making a payment against the tax imposed by 
subtitle A (for the taxable year for which the election was 
made) in an amount equal to $1,000. 
‘‘(b) REFUND OF PAYMENT.—The amount treated as 
a payment under subsection (a) shall be paid by the Sec-
retary to the Trump account with respect to which such 
eligible child is the account beneficiary. 
‘‘(c) ELIGIBLE CHILD.—For purposes of this section, 
the term ‘eligible child’ means a qualifying child (as defined 
in section 152(c))— 
‘‘(1) who is born after December 31, 2024, and 
before January 1, 2029, 
‘‘(2) with respect to whom no prior election has 
been made under this section by such individual or 
any other individual, and
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† HR 1 EAS 
‘‘(3) who is a United States citizen. 
‘‘(d) ELECTION.—An election under this section shall 
be made at such time and in such manner as the Secretary 
shall provide. 
‘‘(e) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(1) IN GENERAL.—This section shall not apply 
to any taxpayer unless such individual includes with 
the election made under this section the social security 
number of the eligible child with respect to whom the 
election is made. 
‘‘(2) SOCIAL SECURITY NUMBER DEFINED.—For 
purposes of paragraph (1), the term ‘social security 
number’ shall have the meaning given such term in 
section 24(h)(7), determined by substituting ‘before 
the date of the election made under section 6434’ for 
‘before the due date of such return’ in subparagraph 
(B) thereof. 
‘‘(f) EXCEPTION FROM REDUCTION OR OFFSET.—Any 
payment made to any individual under this section shall 
not be— 
‘‘(1) subject to reduction or offset pursuant to 
subsection (c), (d), (e), or (f) of section 6402 or any 
similar authority permitting offset, or
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† HR 1 EAS 
‘‘(2) reduced or offset by other assessed Federal 
taxes that would otherwise be subject to levy or collec-
tion. 
‘‘(g) SPECIAL RULE REGARDING INTEREST.—The pe-
riod determined under section 6611(a) with respect to any 
payment under this section shall not begin before January 
1, 2028. 
‘‘(h) MIRROR CODE POSSESSIONS.—In the case of any 
possession of the United States with a mirror code tax sys-
tem (as defined in section 24(k)), this section shall not be 
treated as part of the income tax laws of the United States 
for purposes of determining the income tax law of such pos-
session unless such possession elects to have this section be 
so treated. 
‘‘(i) DEFINITIONS.—For purposes of this section, the 
terms ‘Trump account’ and ‘account beneficiary’ have the 
meaning given such terms in section 530A(b).’’. 
(2) PENALTY FOR NEGLIGENT CLAIM OR FRAUD-
ULENT CLAIM.—Part I of subchapter A of chapter 68 
is amended by adding at the end the following new 
section:
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† HR 1 EAS 
‘‘SEC. 6659. IMPROPER CLAIM FOR TRUMP ACCOUNT CON-
TRIBUTION PILOT PROGRAM CREDIT. 
‘‘(a) IN GENERAL.—In the case of any individual who 
makes an election under section 6434 with respect to an 
individual who is not an eligible child of the taxpayer— 
‘‘(1) if such election was made due to negligence 
or disregard of the rules or regulations, there shall be 
imposed a penalty of $500, or 
‘‘(2) if such election was made due to fraud, 
there shall be imposed a penalty of $1,000. 
‘‘(b) DEFINITIONS.— 
‘‘(1) ELIGIBLE CHILD.—The term ‘eligible child’ 
has the meaning given such term under section 6434. 
‘‘(2) NEGLIGENCE; DISREGARD.—The terms ‘neg-
ligence’ and ‘disregard’ have the same meaning as 
when such terms are used in section 6662.’’. 
(3) OMISSION
OF
CORRECT
SOCIAL
SECURITY 
NUMBER TREATED AS MATHEMATICAL OR CLERICAL 
ERROR.—Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended by striking 
‘‘and’’ at the end of subparagraph (Y), by striking the 
period at the end of subparagraph (Z) and inserting 
‘‘, and’’, and by inserting after subparagraph (Z) the 
following new subparagraph: 
‘‘(AA) an omission of a correct social secu-
rity number required under section 6434(e)(1)
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† HR 1 EAS 
(relating to the Trump accounts contribution 
pilot program).’’. 
(4) CONFORMING AMENDMENTS.— 
(A) The table of sections for subchapter B of 
chapter 65 is amended by adding at the end the 
following new item: 
‘‘Sec. 6434. Trump accounts contribution pilot program.’’. 
(B) The table of sections for part I of sub-
chapter A of chapter 68 is amended by inserting 
after the item relating to section 6658 the fol-
lowing new item: 
‘‘Sec. 6659. Improper claim for Trump account contribution pilot program cred-
it.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
(f) FUNDING.—In addition to amounts otherwise 
available, there is appropriated to the Department of the 
Treasury, out of any money in the Treasury not otherwise 
appropriated, $410,000,000, to remain available until Sep-
tember 30, 2034, to carry out the amendments made by this 
section.
297 
† HR 1 EAS 
CHAPTER 3—ESTABLISHING CERTAINTY 
AND COMPETITIVENESS FOR AMER-
ICAN JOB CREATORS 
Subchapter A—Permanent U.S. Business Tax 
Reform and Boosting Domestic Investment 
SEC. 70301. FULL EXPENSING FOR CERTAIN BUSINESS 
PROPERTY. 
(a) MADE PERMANENT.— 
(1) 
IN
GENERAL.—Section 
168(k)(2)(A) 
is 
amended by adding ‘‘and’’ at the end of clause (i), by 
striking ‘‘, and’’ at the end of clause (ii) and insert-
ing a period, and by striking clause (iii). 
(2) PROPERTY WITH LONGER PRODUCTION PERI-
ODS.—Section 168(k)(2)(B) is amended— 
(A) in clause (i), by striking subclauses (II) 
and (III) and redesignating subclauses (IV), (V), 
and (VI), as subclauses (II), (III), and (IV), re-
spectively, and 
(B) by striking clause (ii) and redesig-
nating clauses (iii) and (iv) as clauses (ii) and 
(iii), respectively. 
(3) 
SELF-CONSTRUCTED
PROPERTY.—Section 
168(k)(2)(E) is amended by striking clause (i) and 
redesignating clauses (ii) and (iii) as clauses (i) and 
(ii), respectively.
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† HR 1 EAS 
(4) CERTAIN PLANTS.—Section 168(k)(5)(A) is 
amended by striking ‘‘planted before January 1, 
2027, or is grafted before such date to a plant that 
has already been planted,’’ in the matter preceding 
clause (i) and inserting ‘‘planted or grafted’’. 
(5) CONFORMING AMENDMENTS.— 
(A) Section 168(k)(2)(A)(ii) is amended by 
striking ‘‘clause (ii) of subparagraph (E)’’ and 
inserting ‘‘clause (i) of subparagraph (E)’’. 
(B) Section 168(k)(2)(C)(i) is amended by 
striking ‘‘and subclauses (II) and (III) of sub-
paragraph (B)(i)’’. 
(C) Section 168(k)(2)(C)(ii) is amended by 
striking ‘‘subparagraph (B)(iii)’’ and inserting 
‘‘subparagraph (B)(ii)’’. 
(D) Section 460(c)(6)(B) is amended by 
striking ‘‘which’’ and all that follows through the 
period and inserting ‘‘which has a recovery pe-
riod of 7 years or less.’’. 
(b) 100 PERCENT EXPENSING.— 
(1) IN GENERAL.—Section 168(k) is amended— 
(A) in paragraph (1)(A), by striking ‘‘the 
applicable percentage’’ and inserting ‘‘100 per-
cent’’, and 
(B) by striking paragraphs (6) and (8).
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† HR 1 EAS 
(2) CERTAIN PLANTS.—Section 168(k)(5)(A)(i) is 
amended by striking ‘‘the applicable percentage’’ and 
inserting ‘‘100 percent’’. 
(3) TRANSITIONAL ELECTION OF REDUCED PER-
CENTAGE.—Section 168(k)(10) is amended by striking 
subparagraph (A), by redesignating subparagraph 
(B) as subparagraph (C), and by inserting before sub-
paragraph (C) (as so redesignated) the following new 
subparagraphs: 
‘‘(A) IN GENERAL.—In the case of qualified 
property placed in service by the taxpayer dur-
ing the first taxable year ending after January 
19, 2025, if the taxpayer elects to have this para-
graph apply for such taxable year, paragraph 
(1)(A) shall be applied— 
‘‘(i) in the case of property which is 
not described in clause (ii), by substituting 
‘40 percent’ for ‘100 percent’, or 
‘‘(ii) in the case of property which is 
described in subparagraph (B) or (C) of 
paragraph (2), by substituting ‘60 percent’ 
for ‘100 percent’. 
‘‘(B) SPECIFIED
PLANTS.—In the case of 
any specified plant planted or grafted by the 
taxpayer during the first taxable year ending
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† HR 1 EAS 
after January 19, 2025, if the taxpayer elects to 
have this paragraph apply for such taxable year, 
paragraph (5)(A)(i) shall be applied by sub-
stituting ‘40 percent’ for ‘100 percent’.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to property acquired after January 
19, 2025. 
(2) SPECIFIED PLANTS.—Except as provided in 
paragraph (3), in the case of any specified plant (as 
defined in section 168(k)(5)(B) of the Internal Rev-
enue Code of 1986, as amended by this section), the 
amendments made by this section shall apply to such 
plants which are planted or grafted after January 19, 
2025. 
(3) TRANSITIONAL ELECTION OF REDUCED PER-
CENTAGE.—The amendment made by subsection 
(b)(3) shall apply to taxable years ending after Janu-
ary 19, 2025. 
(4) ACQUISITION
DATE
DETERMINATION.—For 
purposes of paragraph (1), property shall not be 
treated as acquired after the date on which a written 
binding contract is entered into for such acquisition.
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† HR 1 EAS 
SEC. 70302. FULL EXPENSING OF DOMESTIC RESEARCH AND 
EXPERIMENTAL EXPENDITURES. 
(a) IN GENERAL.—Part VI of subchapter B of chapter 
1 is amended by inserting after section 174 the following 
new section: 
‘‘SEC. 174A. DOMESTIC RESEARCH OR EXPERIMENTAL EX-
PENDITURES. 
‘‘(a) TREATMENT
AS EXPENSES.—Notwithstanding 
section 263, there shall be allowed as a deduction any do-
mestic research or experimental expenditures which are 
paid or incurred by the taxpayer during the taxable year. 
‘‘(b) DOMESTIC RESEARCH OR EXPERIMENTAL EX-
PENDITURES.—For purposes of this section, the term ‘do-
mestic research or experimental expenditures’ means re-
search or experimental expenditures paid or incurred by the 
taxpayer in connection with the taxpayer’s trade or busi-
ness other than such expenditures which are attributable to 
foreign 
research 
(within 
the 
meaning 
of 
section 
41(d)(4)(F)). 
‘‘(c) AMORTIZATION
OF
CERTAIN
DOMESTIC
RE-
SEARCH OR EXPERIMENTAL EXPENDITURES.— 
‘‘(1) IN GENERAL.—At the election of the tax-
payer, made in accordance with regulations or other 
guidance provided by the Secretary, in the case of do-
mestic research or experimental expenditures which 
would (but for subsection (a)) be chargeable to capital
302 
† HR 1 EAS 
account but not chargeable to property of a character 
which is subject to the allowance under section 167 
(relating to allowance for depreciation, etc.) or section 
611 (relating to allowance for depletion), subsection 
(a) shall not apply and the taxpayer shall— 
‘‘(A) charge such expenditures to capital ac-
count, and 
‘‘(B) be allowed an amortization deduction 
of such expenditures ratably over such period of 
not less than 60 months as may be selected by 
the taxpayer (beginning with the month in 
which the taxpayer first realizes benefits from 
such expenditures). 
‘‘(2) TIME FOR AND SCOPE OF ELECTION.—The 
election provided by paragraph (1) may be made for 
any taxable year, but only if made not later than the 
time prescribed by law for filing the return for such 
taxable year (including extensions thereof). The meth-
od so elected, and the period selected by the taxpayer, 
shall be adhered to in computing taxable income for 
the taxable year for which the election is made and 
for all subsequent taxable years unless, with the ap-
proval of the Secretary, a change to a different meth-
od (or to a different period) is authorized with respect 
to part or all of such expenditures. The election shall
303 
† HR 1 EAS 
not apply to any expenditure paid or incurred during 
any taxable year before the taxable year for which the 
taxpayer makes the election. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) LAND AND OTHER PROPERTY.—This section 
shall not apply to any expenditure for the acquisition 
or improvement of land, or for the acquisition or im-
provement of property to be used in connection with 
the research or experimentation and of a character 
which is subject to the allowance under section 167 
(relating to allowance for depreciation, etc.) or section 
611 (relating to allowance for depletion); but for pur-
poses of this section allowances under section 167, 
and allowances under section 611, shall be considered 
as expenditures. 
‘‘(2) EXPLORATION
EXPENDITURES.—This sec-
tion shall not apply to any expenditure paid or in-
curred for the purpose of ascertaining the existence, 
location, extent, or quality of any deposit of ore or 
other mineral (including oil and gas). 
‘‘(3) SOFTWARE
DEVELOPMENT.—For purposes 
of this section, any amount paid or incurred in con-
nection with the development of any software shall be 
treated as a research or experimental expenditure.’’.
304 
† HR 1 EAS 
(b) COORDINATION WITH CERTAIN OTHER PROVI-
SIONS.— 
(1) FOREIGN
RESEARCH
EXPENSES.—Section 
174 is amended— 
(A) in subsection (a)— 
(i) by striking ‘‘a taxpayer’s specified 
research or experimental expenditures’’ and 
inserting ‘‘a taxpayer’s foreign research or 
experimental expenditures’’, and 
(ii) by striking ‘‘over the 5-year period 
(15-year period in the case of any specified 
research or experimental expenditures which 
are attributable to foreign research (within 
the meaning of section 41(d)(4)(F)))’’ in 
paragraph (2)(B) and inserting ‘‘over the 
15-year period’’, 
(B) in subsection (b)— 
(i) by striking ‘‘specified research’’ and 
inserting ‘‘foreign research’’, 
(ii) by inserting ‘‘and which are at-
tributable to foreign research (within the 
meaning of section 41(d)(4)(F))’’ before the 
period at the end, and
305 
† HR 1 EAS 
(iii) by striking ‘‘SPECIFIED’’ in the 
heading thereof and inserting ‘‘FOREIGN’’, 
and 
(C) in subsection (d)— 
(i) by striking ‘‘specified research or 
experimental expenditures’’ and inserting 
‘‘foreign research or experimental expendi-
tures’’, and 
(ii) by inserting ‘‘or reduction to 
amount realized’’ after ‘‘no deduction’’. 
(2) RESEARCH CREDIT.— 
(A) Section 41(d)(1)(A) is amended to read 
as follows: 
‘‘(A) with respect to which expenditures are 
treated as domestic research or experimental ex-
penditures under section 174A,’’. 
(B) Section 280C(c)(1) is amended to read 
as follows: 
‘‘(1) IN GENERAL.—The domestic research or ex-
perimental expenditures (as defined in section 
174A(b)) otherwise taken into account as a deduction 
or charged to capital account under this chapter shall 
be reduced by the amount of the credit allowed under 
section 41(a).’’.
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† HR 1 EAS 
(3) AMT ADJUSTMENT.—Section 56(b)(2) is 
amended— 
(A) in subparagraph (A)— 
(i) by striking ‘‘or 174(a)’’ in the mat-
ter preceding clause (i) and inserting ‘‘, 
174(a), or 174A(a)’’, and 
(ii) by striking ‘‘research and experi-
mental expenditures described in section 
174(a)’’ in clause (ii) thereof and inserting 
‘‘foreign research or experimental expendi-
tures described in section 174(a) and domes-
tic research or experimental expenditures in 
section 174A(a)’’, and 
(B) in subparagraph (C), by inserting ‘‘or 
174A(a)’’ after ‘‘174(a)’’. 
(4) 
OPTIONAL
10-YEAR
WRITEOFF.—Section 
59(e)(2)(B) is amended by striking ‘‘section 174(a) 
(relating to research and experimental expenditures)’’ 
and inserting ‘‘section 174A(a) (relating to domestic 
research or experimental expenditures)’’. 
(5) QUALIFIED
SMALL
ISSUE
BONDS.—Section 
144(a)(4)(C)(iv) is amended by striking ‘‘174(a)’’ and 
inserting ‘‘174A(a)’’.
307 
† HR 1 EAS 
(6) 
START-UP
EXPENDITURES.—Section 
195(c)(1) is amended by striking ‘‘or 174’’ in the last 
sentence and inserting ‘‘174, or 174A’’. 
(7) CAPITAL EXPENDITURES.— 
(A) Section 263(a)(1)(B) is amended by in-
serting ‘‘or 174A’’ after ‘‘174’’. 
(B) Section 263A(c)(2) is amended by in-
serting ‘‘or 174A’’ after ‘‘174’’. 
(8) ACTIVE
BUSINESS
COMPUTER
SOFTWARE 
ROYALTIES.—Section 543(d)(4)(A)(i) is amended by 
inserting ‘‘174A,’’ after ‘‘174,’’. 
(9) 
SOURCE
RULES.—Section 
864(g)(2) 
is 
amended— 
(A) by striking ‘‘research and experimental 
expenditures within the meaning of section 174’’ 
in the first sentence and inserting ‘‘foreign re-
search or experimental expenditures within the 
meaning of section 174 or domestic research or 
experimental expenditures within the meaning of 
section 174A’’, and 
(B) in the last sentence— 
(i) by striking ‘‘treated as deferred ex-
penses under subsection (b) of section 174’’ 
and inserting ‘‘allowed as an amortization
308 
† HR 1 EAS 
deduction under section 174(a) or section 
174A(c),’’, and 
(ii) by striking ‘‘such subsection’’ and 
inserting ‘‘such section (as the case may 
be)’’. 
(10) BASIS ADJUSTMENT.—Section 1016(a)(14) 
is amended by striking ‘‘deductions as deferred ex-
penses under section 174(b)(1) (relating to research 
and experimental expenditures)’’ and inserting ‘‘de-
ductions under section 174 or 174A(c)’’. 
(11) 
SMALL
BUSINESS
STOCK.—Section 
1202(e)(2)(B) is amended by striking ‘‘which may be 
treated as research and experimental expenditures 
under section 174’’ and inserting ‘‘which are treated 
as foreign research or experimental expenditures 
under section 174 or domestic research or experi-
mental expenditures under section 174A’’. 
(c) CHANGE IN METHOD OF ACCOUNTING.— 
(1) IN
GENERAL.—The amendments made by 
subsection (a) shall be treated as a change in method 
of accounting for purposes of section 481 of the Inter-
nal Revenue Code of 1986 and— 
(A) such change shall be treated as initiated 
by the taxpayer,
309 
† HR 1 EAS 
(B) such change shall be treated as made 
with the consent of the Secretary, and 
(C) such change shall be applied only on a 
cut-off basis for any domestic research or experi-
mental expenditures (as defined in section 
174A(b) of such Code (as added by this section) 
and determined by applying the rules of section 
174A(d) of such Code) paid or incurred in tax-
able years beginning after December 31, 2024, 
and no adjustments under section 481(a) shall be 
made. 
(2) SPECIAL RULES.—In the case of a taxable 
year which begins after December 31, 2024, and ends 
before the date of the enactment of this Act— 
(A) paragraph (1)(C) shall not apply, and 
(B) the change in method of accounting 
under paragraph (1) shall be applied on a modi-
fied cut-off basis, taking into account for pur-
poses of section 481(a) of such Code only the do-
mestic research or experimental expenditures (as 
defined in section 174A(b) of such Code (as 
added by this section) and determined by apply-
ing the rules of section 174A(d) of such Code) 
paid or incurred in such taxable year but not al-
lowed as a deduction in such taxable year.
310 
† HR 1 EAS 
(d) CLERICAL AMENDMENT.—The table of sections for 
part VI of subchapter B of chapter 1 is amended by insert-
ing after the item relating to section 174 the following new 
item: 
‘‘Sec. 174A. Domestic research or experimental expenditures.’’. 
(e) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection or subsection (f)(1), the amend-
ments made by this section shall apply to amounts 
paid or incurred in taxable years beginning after De-
cember 31, 2024. 
(2) TREATMENT OF FOREIGN RESEARCH OR EX-
PERIMENTAL EXPENDITURES UPON DISPOSITION.— 
(A) IN GENERAL.—The amendment by sub-
section (b)(1)(C)(ii) shall apply to property dis-
posed, retired, or abandoned after May 12, 2025. 
(B) NO INFERENCE.—The amendment made 
by subsection (b)(1)(C)(ii) shall not be construed 
to create any inference with respect to the proper 
application of section 174(d) of the Internal Rev-
enue Code of 1986 with respect to taxable years 
beginning before May 13, 2025. 
(3) COORDINATION WITH RESEARCH CREDIT.— 
The amendment made by subsection (b)(2)(B) shall 
apply to taxable years beginning after December 31, 
2024.
311 
† HR 1 EAS 
(4) NO INFERENCE WITH RESPECT TO COORDINA-
TION WITH RESEARCH CREDIT FOR PRIOR PERIODS.— 
The amendment made by subsection (b)(2)(B) shall 
not be construed to create any inference with respect 
to the proper application of section 280C(c) of the In-
ternal Revenue Code of 1986 with respect to taxable 
years beginning before January 1, 2025. 
(f) TRANSITION RULES.— 
(1) ELECTION FOR RETROACTIVE APPLICATION 
BY CERTAIN SMALL BUSINESSES.— 
(A) IN GENERAL.—At the election of an eli-
gible taxpayer, paragraphs (1) and (3) of sub-
section (e) shall each be applied by substituting 
‘‘December 31, 2021’’ for ‘‘December 31, 2024’’. 
An election made under this subparagraph shall 
be made in such manner as the Secretary may 
provide and not later than the date that is 1 
year after the date of the enactment of this Act. 
The taxpayer shall file an amended return for 
each taxable year affected by such election. 
(B) ELIGIBLE TAXPAYER.—For purposes of 
this paragraph, the term ‘‘eligible taxpayer’’ 
means any taxpayer (other than a tax shelter 
prohibited from using the cash receipts and dis-
bursements method of accounting under section
312 
† HR 1 EAS 
448(a)(3)) which meets the gross receipts test of 
section 448(c) for the first taxable year begin-
ning after December 31, 2024. 
(C) ELECTION
TREATED
AS
CHANGE
IN 
METHOD OF ACCOUNTING.—In the case of any 
taxpayer which elects the application of subpara-
graph (A)— 
(i) such election may be treated as a 
change in method of accounting for pur-
poses of section 481 of such Code for the 
taxpayer’s first taxable year affected by 
such election, 
(ii) such change shall be treated as ini-
tiated by the taxpayer for such taxable year, 
(iii) such change shall be treated as 
made with the consent of the Secretary, and 
(iv) subsection (c) shall not apply to 
such taxpayer. 
(D) ELECTION
REGARDING
COORDINATION 
WITH
RESEARCH
CREDIT.—An election under 
section 280C(c)(2) of the Internal Revenue Code 
of 1986 (or revocation of such election) for any 
taxable year beginning after December 31, 2021, 
by an eligible taxpayer making an election under 
subparagraph (A) shall not fail to be treated as
313 
† HR 1 EAS 
timely made (or as made on the return) if made 
during the 1-year period beginning on the date 
of the enactment of this Act on an amended re-
turn for such taxable year. 
(2) 
ELECTION
TO
DEDUCT
CERTAIN 
UNAMORTIZED AMOUNTS PAID OR INCURRED IN TAX-
ABLE YEARS BEGINNING BEFORE JANUARY 1, 2025.— 
(A) IN GENERAL.—In the case of any do-
mestic research or experimental expenditures (as 
defined in section 174A, as added by subsection 
(a)) which are paid or incurred in taxable years 
beginning after December 31, 2021, and before 
January 1, 2025, and which was charged to cap-
ital account, a taxpayer may elect— 
(i) 
to 
deduct 
any 
remaining 
unamortized amount with respect to such 
expenditures in the first taxable year begin-
ning after December 31, 2024, or 
(ii) 
to 
deduct 
such 
remaining 
unamortized amount with respect to such 
expenditures ratably over the 2-taxable year 
period beginning with the first taxable year 
beginning after December 31, 2024.
314 
† HR 1 EAS 
(B) CHANGE IN METHOD OF ACCOUNTING.— 
In the case of a taxpayer who makes an election 
under this paragraph— 
(i) such taxpayer shall be treated as 
initiating a change in method of accounting 
for purposes of section 481 of the Internal 
Revenue Code of 1986 with respect to the ex-
penditures to which the election applies, 
(ii) such change shall be treated as 
made with the consent of the Secretary, and 
(iii) such change shall be applied only 
on a cut-off basis for such expenditures and 
no adjustments under section 481(a) shall 
be made. 
(C) REGULATIONS.—The Secretary of the 
Treasury (or the Secretary’s delegate) shall pub-
lish such guidance or regulations as may be nec-
essary to carry out the purposes of this para-
graph, including regulations or guidance allow-
ing for the deduction allowed under subpara-
graph (A) in the case of taxpayers with taxable 
years beginning after December 31, 2024, and 
ending before the date of the enactment of this 
Act.
315 
† HR 1 EAS 
SEC. 70303. MODIFICATION OF LIMITATION ON BUSINESS 
INTEREST. 
(a) IN GENERAL.—Section 163(j)(8)(A)(v) is amended 
by striking ‘‘in the case of taxable years beginning before 
January 1, 2022,’’. 
(b) FLOOR PLAN FINANCING APPLICABLE TO CERTAIN 
TRAILERS AND CAMPERS.—Section 163(j)(9)(C) is amend-
ed by adding at the end the following new flush sentence: 
‘‘Such term shall also include any trailer or 
camper which is designed to provide temporary 
living quarters for recreational, camping, or sea-
sonal use and is designed to be towed by, or af-
fixed to, a motor vehicle.’’. 
(c) EFFECTIVE DATE AND SPECIAL RULE.— 
(1) IN
GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2024. 
(2) 
SPECIAL
RULE
FOR
SHORT
TAXABLE 
YEARS.—The Secretary of the Treasury (or the Sec-
retary’s delegate) may prescribe such rules as are nec-
essary or appropriate to provide for the application 
of the amendments made by this section in the case 
of any taxable year of less than 12 months that begins 
after December 31, 2024, and ends before the date of 
the enactment of this Act.
316 
† HR 1 EAS 
SEC. 70304. EXTENSION AND ENHANCEMENT OF PAID FAM-
ILY AND MEDICAL LEAVE CREDIT. 
(a) IN GENERAL.—Section 45S is amended— 
(1) in subsection (a)— 
(A) by striking paragraph (1) and inserting 
the following: 
‘‘(1) IN GENERAL.—For purposes of section 38, 
in the case of an eligible employer, the paid family 
and medical leave credit is an amount equal to either 
of the following (as elected by such employer): 
‘‘(A) The applicable percentage of the 
amount of wages paid to qualifying employees 
with respect to any period in which such em-
ployees are on family and medical leave. 
‘‘(B) If such employer has an insurance pol-
icy with regards to the provision of paid family 
and medical leave which is in force during the 
taxable year, the applicable percentage of the 
total amount of premiums paid or incurred by 
such employer during such taxable year with re-
spect to such insurance policy.’’, and 
(B) by adding at the end the following: 
‘‘(3) RATE OF PAYMENT DETERMINED WITHOUT 
REGARD TO WHETHER LEAVE IS TAKEN.—For pur-
poses of determining the applicable percentage with 
respect to paragraph (1)(B), the rate of payment
317 
† HR 1 EAS 
under the insurance policy shall be determined with-
out regard to whether any qualifying employees were 
on family and medical leave during the taxable 
year.’’, 
(2) in subsection (b)(1), by striking ‘‘credit al-
lowed’’ and inserting ‘‘wages taken into account’’, 
(3) in subsection (c), by striking paragraphs (3) 
and (4) and inserting the following: 
‘‘(3) AGGREGATION RULE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), all persons which are treated 
as a single employer under subsections (b) and 
(c) of section 414 shall be treated as a single em-
ployer. 
‘‘(B) EXCEPTION.— 
‘‘(i) IN GENERAL.—Subparagraph (A) 
shall not apply to any person who estab-
lishes to the satisfaction of the Secretary 
that such person has a substantial and le-
gitimate business reason for failing to pro-
vide a written policy described in para-
graph (1) or (2). 
‘‘(ii) SUBSTANTIAL
AND
LEGITIMATE 
BUSINESS REASON.—For purposes of clause 
(i), the term ‘substantial and legitimate
318 
† HR 1 EAS 
business reason’ shall not include the oper-
ation of a separate line of business, the rate 
of wages or category of jobs for employees 
(or any similar basis), or the application of 
State or local laws relating to family and 
medical leave, but may include the grouping 
of employees of a common law employer. 
‘‘(4) TREATMENT OF BENEFITS MANDATED OR 
PAID FOR BY STATE OR LOCAL GOVERNMENTS.—For 
purposes of this section, any leave which is paid by 
a State or local government or required by State or 
local law— 
‘‘(A) except as provided in subparagraph 
(B), shall be taken into account in determining 
the amount of paid family and medical leave 
provided by the employer, and 
‘‘(B) shall not be taken into account in de-
termining the amount of the paid family and 
medical leave credit under subsection (a).’’, 
(4) in subsection (d)— 
(A) in paragraph (1), by inserting ‘‘(or, at 
the election of the employer, for not less than 6 
months)’’ after ‘‘1 year or more’’, 
(B) in paragraph (2)—
319 
† HR 1 EAS 
(i) by inserting ‘‘, as determined on an 
annualized basis (pro-rata for part-time 
employees),’’ after ‘‘compensation’’, and 
(ii) by striking the period at the end 
and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(3) is customarily employed for not less than 20 
hours per week.’’, and 
(5) by striking subsection (i). 
(b) NO
DOUBLE
BENEFIT.—Section 280C(a) is 
amended— 
(1) 
by 
striking 
‘‘45S(a)’’ 
and 
inserting 
‘‘45S(a)(1)(A)’’, and 
(2) by inserting after the first sentence the fol-
lowing: ‘‘No deduction shall be allowed for that por-
tion of the premiums paid or incurred for the taxable 
year which is equal to that portion of the paid family 
and medical leave credit which is determined for the 
taxable year under section 45S(a)(1)(B).’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025.
320 
† HR 1 EAS 
SEC. 70305. EXCEPTIONS FROM LIMITATIONS ON DEDUC-
TION FOR BUSINESS MEALS. 
(a) EXCEPTION TO DENIAL OF DEDUCTION FOR BUSI-
NESS MEALS.—Section 274(o), as added by section 13304 
of Public Law 115-97, is amended by striking ‘‘No deduc-
tion’’ and inserting ‘‘Except in the case of an expense de-
scribed in subsection (e)(8) or (n)(2)(C), no deduction’’. 
(b) MEALS PROVIDED ON CERTAIN FISHING BOATS 
AND AT CERTAIN FISH PROCESSING FACILITIES NOT SUB-
JECT TO 50 PERCENT LIMITATION.—Section 274(n)(2)(C) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘or’’ at the end of clause (iii) and by adding at the 
end the following new clause: 
‘‘(v) provided— 
‘‘(I) on a fishing vessel, fish proc-
essing vessel, or fish tender vessel (as 
such terms are defined in section 2101 
of title 46, United States Code), or 
‘‘(II) at a facility for the proc-
essing of fish for commercial use or 
consumption which— 
‘‘(aa) 
is 
located 
in 
the 
United States north of 50 degrees 
north latitude, and 
‘‘(bb) is not located in a met-
ropolitan statistical area (within
321 
† HR 1 EAS 
the 
meaning 
of 
section 
143(k)(2)(B)), or’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to amounts paid or incurred after De-
cember 31, 2025. 
SEC. 70306. INCREASED DOLLAR LIMITATIONS FOR EXPENS-
ING OF CERTAIN DEPRECIABLE BUSINESS AS-
SETS. 
(a) IN GENERAL.—Section 179(b) is amended— 
(1) in paragraph (1), by striking ‘‘$1,000,000’’ 
and inserting ‘‘$2,500,000’’, and 
(2) in paragraph (2), by striking ‘‘$2,500,000’’ 
and inserting ‘‘$4,000,000’’. 
(b) 
CONFORMING
AMENDMENTS.—Section 
179(b)(6)(A) is amended— 
(1) by inserting ‘‘(2025 in the case of the dollar 
amounts in paragraphs (1) and (2))’’ after ‘‘In the 
case of any taxable year beginning after 2018’’, and 
(2) in clause (ii), by striking ‘‘determined by 
substituting ‘calendar year 2017’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof.’’ and inserting 
″determined by substituting in subparagraph (A)(ii) 
thereof— ‘‘
322 
† HR 1 EAS 
‘‘(I) in the case of amounts in 
paragraphs (1) and (2), ‘calendar year 
2024’ for ‘calendar year 2016’, and 
‘‘(II) in the case of the amount in 
paragraph (5)(A), ‘calendar year 2017’ 
for ‘calendar year 2016’.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to property placed in service in taxable 
years beginning after December 31, 2024. 
SEC. 70307. SPECIAL DEPRECIATION ALLOWANCE FOR 
QUALIFIED PRODUCTION PROPERTY. 
(a) IN GENERAL.—Section 168 is amended by adding 
at the end the following new subsection: 
‘‘(n) SPECIAL ALLOWANCE FOR QUALIFIED PRODUC-
TION PROPERTY.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
production property of a taxpayer making an election 
under this subsection— 
‘‘(A) the depreciation deduction provided by 
section 167(a) for the taxable year in which such 
property is placed in service shall include an al-
lowance equal to 100 percent of the adjusted 
basis of the qualified production property, and 
‘‘(B) the adjusted basis of the qualified pro-
duction property shall be reduced by the amount
323 
† HR 1 EAS 
of such deduction before computing the amount 
otherwise allowable as a depreciation deduction 
under this chapter for such taxable year and any 
subsequent taxable year. 
‘‘(2) QUALIFIED
PRODUCTION
PROPERTY.—For 
purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
production property’ means that portion of any 
nonresidential real property— 
‘‘(i) to which this section applies, 
‘‘(ii) which is used by the taxpayer as 
an integral part of a qualified production 
activity, 
‘‘(iii) which is placed in service in the 
United States or any possession of the 
United States, 
‘‘(iv) the original use of which com-
mences with the taxpayer, 
‘‘(v) the construction of which begins 
after January 19, 2025, and before January 
1, 2029, 
‘‘(vi) which is designated by the tax-
payer in the election made under this sub-
section, and
324 
† HR 1 EAS 
‘‘(vii) which is placed in service before 
January 1, 2031. 
For purposes of clause (ii), in the case of prop-
erty with respect to which the taxpayer is a les-
sor, property used by a lessee shall not be consid-
ered to be used by the taxpayer as part of a 
qualified production activity. 
‘‘(B) SPECIAL
RULE
FOR
CERTAIN
PROP-
ERTY NOT PREVIOUSLY USED IN QUALIFIED PRO-
DUCTION ACTIVITIES.— 
‘‘(i) IN GENERAL.—In the case of prop-
erty acquired by the taxpayer during the 
period described in subparagraph (A)(v), 
the requirements of clauses (iv) and (v) of 
subparagraph (A) shall be treated as satis-
fied if— 
‘‘(I) such property was not used 
in a qualified production activity (de-
termined without regard to the second 
sentence of subparagraph (D)) by any 
person at any time during the period 
beginning on January 1, 2021, and 
ending on May 12, 2025,
325 
† HR 1 EAS 
‘‘(II) such property was not used 
by the taxpayer at any time prior to 
such acquisition, and 
‘‘(III) the acquisition of such 
property meets the requirements of 
paragraphs (2)(A), (2)(B), (2)(C), and 
(3) of section 179(d). 
‘‘(ii) WRITTEN BINDING CONTRACTS.— 
For purposes of determining under clause 
(i)— 
‘‘(I) whether such property is ac-
quired before the period described in 
subparagraph (A)(v), such property 
shall be treated as acquired not later 
than the date on which the taxpayer 
enters into a written binding contract 
for such acquisition, and 
‘‘(II) whether such property is ac-
quired after such period, such property 
shall be treated as acquired not earlier 
than such date. 
‘‘(C) EXCLUSION OF OFFICE SPACE, ETC.— 
The term ‘qualified production property’ shall 
not include that portion of any nonresidential 
real property which is used for offices, adminis-
326 
† HR 1 EAS 
trative services, lodging, parking, sales activities, 
research activities, software development or engi-
neering activities, or other functions unrelated to 
the manufacturing, production, or refining of 
tangible personal property. 
‘‘(D) QUALIFIED PRODUCTION ACTIVITY.— 
The term ‘qualified production activity’ means 
the manufacturing, production, or refining of a 
qualified product. The activities of any taxpayer 
do not constitute manufacturing, production, or 
refining of a qualified product unless the activi-
ties of such taxpayer result in a substantial 
transformation of the property comprising the 
product. 
‘‘(E) PRODUCTION.—The term ‘production’ 
shall not include activities other than agricul-
tural production and chemical production. 
‘‘(F) 
QUALIFIED
PRODUCT.—The 
term 
‘qualified product’ means any tangible personal 
property if such property is not a food or bev-
erage prepared in the same building as a retail 
establishment in which such property is sold. 
‘‘(G) SYNDICATION.—For purposes of sub-
paragraph (A)(iv), rules similar to the rules of 
subsection (k)(2)(E)(iii) shall apply.
327 
† HR 1 EAS 
‘‘(H) EXTENSION OF PLACED IN SERVICE 
DATE
UNDER
CERTAIN
CIRCUMSTANCES.—The 
Secretary may extend the date under subpara-
graph (A)(vii) with respect to any property that 
meets the requirements of clauses (i) through (vi) 
of subparagraph (A) if the Secretary determines 
that an act of God (as defined in section 101(1) 
of the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980) pre-
vents the taxpayer from placing such property in 
service before such date. 
‘‘(3) DEDUCTION ALLOWED IN COMPUTING MIN-
IMUM TAX.—For purposes of determining alternative 
minimum taxable income under section 55, the deduc-
tion under section 167 for qualified production prop-
erty shall be determined under this section without re-
gard to any adjustment under section 56. 
‘‘(4) COORDINATION WITH CERTAIN OTHER PRO-
VISIONS.— 
‘‘(A) OTHER
SPECIAL
DEPRECIATION
AL-
LOWANCES.—For purposes of subsections (k)(7), 
(l)(3)(D), and (m)(2)(B)(iii)— 
‘‘(i) 
qualified 
production 
property 
shall be treated as a separate class of prop-
erty, and
328 
† HR 1 EAS 
‘‘(ii) the taxpayer shall be treated as 
having made an election under such sub-
sections with respect to such class. 
‘‘(B) ALTERNATIVE
DEPRECIATION
PROP-
ERTY.—The term ‘qualified production property’ 
shall not include any property to which the al-
ternative depreciation system under subsection 
(g) applies. For purposes of subsection (g)(7)(A), 
qualified production property to which this sub-
section applies shall be treated as separate non-
residential real property. 
‘‘(5) RECAPTURE.—If, at any time during the 
10-year period beginning on the date that any quali-
fied production property is placed in service by the 
taxpayer, such property ceases to be used as described 
in paragraph (2)(A)(ii) and is used by the taxpayer 
in a productive use not described in paragraph 
(2)(A)(ii)— 
‘‘(A) section 1245 shall be applied— 
‘‘(i) by treating such property as hav-
ing been disposed of by the taxpayer as of 
the first time such property is so used in a 
productive use not described in paragraph 
(2)(A)(ii), and
329 
† HR 1 EAS 
‘‘(ii) by treating the amount described 
in subparagraph (B) of section 1245(a)(1) 
with respect to such disposition as being not 
less than the amount described in subpara-
graph (A) of such section, and 
‘‘(B) the basis of the taxpayer in such prop-
erty, and the taxpayer’s allowance for deprecia-
tion with respect to such property, shall be ap-
propriately adjusted to take into account 
amounts recognized by reason of subparagraph 
(A). 
‘‘(6) ELECTION.— 
‘‘(A) IN GENERAL.—An election under this 
subsection for any taxable year shall— 
‘‘(i) specify the nonresidential real 
property subject to the election and the por-
tion of such property designated under 
paragraph (2)(A)(vi), and 
‘‘(ii) except as otherwise provided by 
the Secretary, be made on the taxpayer’s re-
turn of the tax imposed by this chapter for 
the taxable year. 
Such election shall be made in such manner as 
the Secretary may prescribe by regulations or 
other guidance.
330 
† HR 1 EAS 
‘‘(B) ELECTION.—Any election made under 
this subsection, and any specification contained 
in any such election, may not be revoked except 
with the consent of the Secretary (and the Sec-
retary shall provide such consent only in ex-
traordinary circumstances). 
‘‘(7) REGULATIONS.—The Secretary shall issue 
such regulations or other guidance as may be nec-
essary or appropriate to carry out the purposes of 
this subsection, including regulations or other guid-
ance— 
‘‘(A) providing rules for regarding what 
constitutes substantial transformation of prop-
erty which are consistent with guidance provided 
under section 954(d), and 
‘‘(B) providing for the application of para-
graph (5) with respect to a change in use de-
scribed in such paragraph by a transferee fol-
lowing a fully or partially tax free transfer of 
qualified production property.’’. 
(b) TREATMENT OF QUALIFIED PRODUCTION PROP-
ERTY AS SECTION 1245 PROPERTY.—Section 1245(a)(3) is 
amended by striking ‘‘or’’ at the end of subparagraph (E), 
by striking the period at the end of subparagraph (F) and
331 
† HR 1 EAS 
inserting ‘‘, or’’, and by adding at the end the following 
new subparagraph: 
‘‘(G) any qualified production property (as 
defined in section 168(n)(2)).’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to property placed in service after the 
date of the enactment of this Act. 
SEC. 
70308. 
ENHANCEMENT 
OF 
ADVANCED 
MANUFAC-
TURING INVESTMENT CREDIT. 
(a) IN GENERAL.—Section 48D(a) is amended by 
striking ‘‘25 percent’’ and inserting ‘‘35 percent’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to property placed in service after De-
cember 31, 2025. 
SEC. 70309. SPACEPORTS ARE TREATED LIKE AIRPORTS 
UNDER EXEMPT FACILITY BOND RULES. 
(a) IN GENERAL.—Section 142(a)(1) is amended to 
read as follows: 
‘‘(1) airports and spaceports,’’. 
(b) TREATMENT
OF
GROUND
LEASES.—Section 
142(b)(1) is amended by adding at the end the following 
new subparagraph: 
‘‘(C) 
SPECIAL
RULE
FOR
SPACEPORT 
GROUND
LEASES.—For purposes of subpara-
graph (A), spaceport property located on land
332 
† HR 1 EAS 
leased by a governmental unit from the United 
States shall not fail to be treated as owned by a 
governmental unit if the requirements of this 
paragraph are met by the lease and any sub-
leases of the property.’’. 
(c) DEFINITION
OF
SPACEPORT.—Section 142 is 
amended by adding at the end the following new subsection: 
‘‘(p) SPACEPORT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(1), the term ‘spaceport’ means any facility located 
at or in close proximity to a launch site or reentry 
site used for— 
‘‘(A) manufacturing, assembling, or repair-
ing spacecraft, space cargo, other facilities de-
scribed in this paragraph, or any component of 
the foregoing, 
‘‘(B) flight control operations, 
‘‘(C) providing launch services and reentry 
services, or 
‘‘(D) transferring crew, spaceflight partici-
pants, or space cargo to or from spacecraft. 
‘‘(2) ADDITIONAL
TERMS.—For purposes of 
paragraph (1)— 
‘‘(A) SPACE CARGO.—The term ‘space cargo’ 
includes satellites, scientific experiments, other
333 
† HR 1 EAS 
property transported into space, and any other 
type of payload, whether or not such property re-
turns from space. 
‘‘(B) SPACECRAFT.—The term ‘spacecraft’ 
means a launch vehicle or a reentry vehicle. 
‘‘(C) OTHER
TERMS.—The terms ‘launch 
site’, ‘crew’, ‘space flight participant’, ‘launch 
services’, ‘launch vehicle’, ‘payload’, ‘reentry 
services’, ‘reentry site’, a ‘reentry vehicle’ shall 
have the respective meanings given to such terms 
by section 50902 of title 51, United States Code 
(as in effect on the date of enactment of this sub-
section). 
‘‘(3) PUBLIC
USE
REQUIREMENT.—A facility 
shall not be required to be available for use by the 
general public to be treated as a spaceport for pur-
poses of this section. 
‘‘(4) MANUFACTURING
FACILITIES
AND
INDUS-
TRIAL PARKS ALLOWED.—With respect to spaceports, 
subsection (c)(2)(E) shall not apply to spaceport 
property described in paragraph (1)(A).’’. 
(d) EXCEPTION
FROM
FEDERALLY
GUARANTEED 
BOND PROHIBITION.—Section 149(b)(3) is amended by 
adding at the end the following new subparagraph:
334 
† HR 1 EAS 
‘‘(F) EXCEPTION
FOR
SPACEPORTS.—A 
bond shall not be treated as federally guaranteed 
merely because of the payment of rent, user fees, 
or other charges by the United States (or any 
agency or instrumentality thereof) in exchange 
for the use of the spaceport by the United States 
(or any agency or instrumentality thereof).’’. 
(e) CONFORMING AMENDMENT.—The heading for sec-
tion 142(c) is amended by inserting ‘‘SPACEPORTS,’’ after 
‘‘AIRPORTS,’’. 
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to obligations issued after the date of 
the enactment of this Act. 
Subchapter B—Permanent America-first 
International Tax Reforms 
PART I—FOREIGN TAX CREDIT 
SEC. 70311. MODIFICATIONS RELATED TO FOREIGN TAX 
CREDIT LIMITATION. 
(a) RULES FOR ALLOCATION OF CERTAIN DEDUC-
TIONS TO FOREIGN SOURCE NET CFC TESTED INCOME FOR 
PURPOSES OF FOREIGN TAX CREDIT LIMITATION.—Section 
904(b) is amended by adding at the end the following new 
paragraph: 
‘‘(5) DEDUCTIONS TREATED AS ALLOCABLE TO 
FOREIGN SOURCE NET CFC TESTED INCOME.—Solely
335 
† HR 1 EAS 
for purposes of the application of subsection (a) with 
respect to amounts described in subsection (d)(1)(A), 
the taxpayer’s taxable income from sources without 
the United States shall be determined by allocating 
and apportioning— 
‘‘(A) any deduction allowed under section 
250(a)(1)(B) (and any deduction allowed under 
section 164(a)(3) for taxes imposed on amounts 
described in section 250(a)(1)(B)) to such in-
come, 
‘‘(B) no amount of interest expense or re-
search and experimental expenditures to such in-
come, and 
‘‘(C) any other deduction to such income 
only if such deduction is directly allocable to 
such income. 
Any amount or deduction which would (but for sub-
paragraphs (B) and (C)) have been allocated or ap-
portioned to such income shall only be allocated or 
apportioned to income which is from sources within 
the United States.’’. 
(b) OTHER MODIFICATIONS.— 
(1) Section 904(d)(2)(H)(i) is amended by strik-
ing ‘‘paragraph (1)(B)’’ and inserting ‘‘paragraph 
(1)(D)’’.
336 
† HR 1 EAS 
(2) Section 904(d)(4)(C)(ii) is amended by strik-
ing ‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph 
(1)(C)’’. 
(3) Section 951A(f)(1)(A) is amended by striking 
‘‘904(h)(1)’’ and inserting ‘‘904(h)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 
70312. 
MODIFICATIONS 
TO 
DETERMINATION 
OF 
DEEMED PAID CREDIT FOR TAXES PROPERLY 
ATTRIBUTABLE TO TESTED INCOME. 
(a) INCREASE IN DEEMED PAID CREDIT.— 
(1) IN GENERAL.—Section 960(d)(1) is amended 
by striking ‘‘80 percent’’ and inserting ‘‘90 percent’’. 
(2) GROSS UP FOR DEEMED PAID FOREIGN TAX 
CREDIT.—Section 78 is amended— 
(A) by striking ‘‘subsections (a), (b), and 
(d)’’ and inserting ‘‘subsections (a) and (d)’’, 
and 
(B) by striking ‘‘80 percent’’ and inserting 
‘‘90 percent’’. 
(b) DISALLOWANCE OF FOREIGN TAX CREDIT WITH 
RESPECT TO DISTRIBUTIONS OF PREVIOUSLY TAXED NET 
CFC TESTED INCOME.—Section 960(d) is amended by add-
ing at the end the following new paragraph:
337 
† HR 1 EAS 
‘‘(4) DISALLOWANCE OF FOREIGN TAX CREDIT 
WITH
RESPECT
TO
DISTRIBUTIONS
OF
PREVIOUSLY 
TAXED NET CFC TESTED INCOME.—No credit shall be 
allowed under section 901 for 10 percent of any for-
eign income taxes paid or accrued (or deemed paid 
under subsection (b)(1)) with respect to any amount 
excluded from gross income under section 959(a) by 
reason of an inclusion in gross income under section 
951A(a).’’. 
(c) EFFECTIVE DATES.— 
(1) IN
GENERAL.—The amendments made by 
subsection (a) shall apply to taxable years beginning 
after December 31, 2025. 
(2) DISALLOWANCE.—The amendment made by 
subsection (b) shall apply to foreign income taxes 
paid or accrued (or deemed paid under section 
960(b)(1) of the Internal Revenue Code of 1986) with 
respect to any amount excluded from gross income 
under section 959(a) of such Code by reason of an in-
clusion in gross income under section 951A(a) of such 
Code after June 28, 2025.
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† HR 1 EAS 
SEC. 70313. SOURCING CERTAIN INCOME FROM THE SALE 
OF INVENTORY PRODUCED IN THE UNITED 
STATES. 
(a) IN GENERAL.—Section 904(b), as amended by sec-
tion 70311, is amended by adding at the end the following 
new paragraph: 
‘‘(6) SOURCE RULES FOR CERTAIN INVENTORY 
PRODUCED
IN
THE
UNITED
STATES
AND
SOLD 
THROUGH FOREIGN BRANCHES.—For purposes of this 
section, if a United States person maintains an office 
or other fixed place of business in a foreign country 
(determined under rules similar to the rules of section 
864(c)(5)), the portion of income which— 
‘‘(A) is from the sale or exchange outside the 
United States of inventory property (within the 
meaning of section 865(i)(1))— 
‘‘(i) which is produced in the United 
States, 
‘‘(ii) which is for use outside the 
United States, and 
‘‘(iii) to which the third sentence of 
section 863(b) applies, and 
‘‘(B) is attributable (determined under rules 
similar to the rules of section 864(c)(5)) to such 
office or other fixed place of business,
339 
† HR 1 EAS 
shall be treated as from sources without the United 
States, except that the amount so treated shall not ex-
ceed 50 percent of the income from the sale or ex-
change of such inventory property.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
PART II—FOREIGN-DERIVED DEDUCTION 
ELIGIBLE INCOME AND NET CFC TESTED INCOME 
SEC. 70321. MODIFICATION OF DEDUCTION FOR FOREIGN- 
DERIVED DEDUCTION ELIGIBLE INCOME AND 
NET CFC TESTED INCOME. 
(a) IN GENERAL.—Section 250(a) is amended— 
(1) by striking ‘‘37.5 percent’’ in paragraph 
(1)(A) and inserting ‘‘33.34 percent’’, 
(2) by striking ‘‘50 percent’’ in paragraph 
(1)(B) and inserting ‘‘40 percent’’, and 
(3) by striking paragraph (3). 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70322. DETERMINATION OF DEDUCTION ELIGIBLE IN-
COME. 
(a) SALES
OR OTHER DISPOSITIONS
OF CERTAIN 
PROPERTY.—
340 
† HR 1 EAS 
(1) IN
GENERAL.—Section 250(b)(3)(A)(i) is 
amended— 
(A) by striking ‘‘and’’ at the end of sub-
clause (V), 
(B) by striking ‘‘over’’ at the end of sub-
clause (VI) and inserting ‘‘and’’, and 
(C) by adding at the end the following new 
subclause: 
‘‘(VII) except as otherwise pro-
vided by the Secretary, any income 
and gain from the sale or other dis-
position (including pursuant to the 
deemed sale or other deemed disposi-
tion or a transaction subject to section 
367(d)) of— 
‘‘(aa) intangible property (as 
defined in section 367(d)(4)), and 
‘‘(bb) any other property of a 
type that is subject to deprecia-
tion, amortization, or depletion by 
the seller, over’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
250(b)(5)(E) is amended by inserting ‘‘(other than 
paragraph (3)(A)(i)(VII))’’ after ‘‘For purposes of 
this subsection’’.
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† HR 1 EAS 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to sales or other dis-
positions (including pursuant to deemed sales or other 
deemed dispositions or a transaction subject to section 
367(d) of the Internal Revenue Code of 1986) occur-
ring after June 16, 2025. 
(b) EXPENSE APPORTIONMENT LIMITED TO PROPERLY 
ALLOCABLE EXPENSES.— 
(1) IN
GENERAL.—Section 250(b)(3)(A)(ii) is 
amended to read as follows: 
‘‘(ii) expenses and deductions (includ-
ing taxes), other than interest expense and 
research 
or 
experimental 
expenditures, 
properly allocable to such gross income.’’. 
(2) EFFECTIVE DATE.—The amendment made by 
this subsection shall apply to taxable years beginning 
after December 31, 2025. 
SEC. 70323. RULES RELATED TO DEEMED INTANGIBLE IN-
COME. 
(a) TAXATION OF NET CFC TESTED INCOME.— 
(1) IN GENERAL.—Section 951A(a) is amended 
by striking ‘‘global intangible low-taxed income’’ and 
inserting ‘‘net CFC tested income’’. 
(2) REPEAL OF TAX-FREE DEEMED RETURN ON 
FOREIGN INVESTMENTS.—Section 951A, as amended
342 
† HR 1 EAS 
by the preceding provisions of this Act, is amended by 
striking subsections (b) and (d) and by redesignating 
subsections (c), (e), and (f) as subsections (b), (c), and 
(d), respectively. 
(3) CONFORMING AMENDMENTS.— 
(A)(i) Section 250 is amended by striking 
‘‘global intangible low-taxed income’’ each place 
it appears in subsections (a)(1)(B)(i), (a)(2), 
and (b)(3)(A)(i)(II) and inserting ‘‘net CFC test-
ed income’’. 
(ii) The heading for section 250 of such 
Code is amended by striking ‘‘GLOBAL INTAN-
GIBLE
LOW-TAXED
INCOME’’ and inserting 
‘‘NET CFC TESTED INCOME’’. 
(iii) The item relating to section 250 in the 
table of sections for part VII of subchapter B of 
chapter 1 of such Code is amended by striking 
‘‘global intangible low-taxed income’’ and insert-
ing ‘‘net CFC tested income’’. 
(B) Section 951A(c)(1), as redesignated by 
paragraph (2), is amended by striking ‘‘sub-
sections (b), (c)(1)(A), and (c)(1)(B)’’ and insert-
ing ‘‘subsections (b)(1)(A) and (b)(1)(B)’’. 
(C) Section 951A(d), as redesignated by 
paragraph (2), is amended—
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† HR 1 EAS 
(i) by striking ‘‘global intangible low- 
taxed income’’ each place it appears and in-
serting ‘‘net CFC tested income’’, and 
(ii) by striking ‘‘subsection (c)(1)(A)’’ 
in paragraph (2)(B)(ii) and inserting ‘‘sub-
section (b)(1)(A)’’. 
(D) Section 960(d)(2) is amended— 
(i) by striking ‘‘global intangible low- 
taxed income’’ in subparagraph (A) and in-
serting ‘‘net CFC tested income’’, and 
(ii) 
by 
striking 
‘‘section 
951A(c)(1)(A)’’ in subparagraph (B) and 
inserting ‘‘section 951A(b)(1)(A)’’. 
(E)(i) The heading for section 951A is 
amended by striking ‘‘GLOBAL
INTANGIBLE 
LOW-TAXED
INCOME’’ and inserting ‘‘NET 
CFC TESTED INCOME’’. 
(ii) The item relating to section 951A in the 
table of sections for subpart F of part III of sub-
chapter N of chapter 1 is amended by striking 
‘‘Global intangible low-taxed income’’ and insert-
ing ‘‘Net CFC tested income’’. 
(b) DEDUCTION FOR FOREIGN-DERIVED DEDUCTION 
ELIGIBLE INCOME.—
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† HR 1 EAS 
(1) 
IN
GENERAL.—Section 
250(a)(1)(A) 
is 
amended by striking ‘‘foreign-derived intangible in-
come’’ and inserting ‘‘foreign-derived deduction eligi-
ble income’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 250(a)(2) is amended by strik-
ing ‘‘foreign-derived intangible income’’ each 
place it appears and inserting ‘‘foreign-derived 
deduction eligible income’’. 
(B) Section 250(b), as amended by sub-
section (a), is amended— 
(i) by striking paragraphs (1) and (2), 
(ii) by redesignating paragraphs (4) 
and (5) as paragraphs (1) and (2), respec-
tively, and by moving such paragraphs be-
fore paragraph (3), 
(iii) in paragraph (2)(B)(ii), as so re-
designated, by striking ‘‘paragraph (4)(B)’’ 
and inserting ‘‘paragraph (1)(B)’’, and 
(iv) by striking ‘‘INTANGIBLE’’ in the 
heading thereof and inserting ‘‘DEDUCTION 
ELIGIBLE’’. 
(C)(i) The heading for section 250 is 
amended by striking ‘‘INTANGIBLE’’ in the
345 
† HR 1 EAS 
heading thereof and inserting ‘‘DEDUCTION EL-
IGIBLE’’. 
(ii) The heading for section 172(d)(9) is 
amended by striking ‘‘INTANGIBLE’’ and insert-
ing ‘‘DEDUCTION ELIGIBLE’’. 
(iii) The item relating to section 250 in the 
table of sections for part VIII of subchapter B of 
chapter 1 is amended by striking ‘‘intangible’’ 
and inserting ‘‘deduction eligible’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
PART III—BASE EROSION MINIMUM TAX 
SEC. 70331. EXTENSION AND MODIFICATION OF BASE ERO-
SION MINIMUM TAX AMOUNT. 
(a) IN GENERAL.—Section 59A(b) is amended— 
(1) by striking ‘‘10 percent’’ in paragraph (1) 
and inserting ‘‘10.5 percent’’, and 
(2) by striking paragraph (2) and by redesig-
nating paragraphs (3) and (4) as paragraphs (2) and 
(3), respectively. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 59A(b)(1) is amended by striking 
‘‘Except as provided in paragraphs (2) and (3)’’ and 
inserting ‘‘Except as provided in paragraph (2)’’.
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† HR 1 EAS 
(2) Section 59A(b)(2), as redesignated by sub-
section (a)(2), is amended by striking ‘‘the percentage 
otherwise in effect under paragraphs (1)(A) and 
(2)(A) shall each be increased’’ and inserting ‘‘the 
percentages otherwise in effect under paragraph 
(1)(A) shall be increased’’. 
(3) Section 59A(e)(1)(C) is amended by striking 
‘‘in the case of a taxpayer described in subsection 
(b)(3)(B)’’ and inserting ‘‘in the case of a taxpayer 
described in subsection (b)(2)(B)’’. 
(c) OTHER MODIFICATIONS.— 
(1) Section 59A(b)(2)(B)(ii), as redesignated by 
subsection (a)(2), is amended by striking ‘‘registered 
securities dealer’’ and inserting ‘‘securities dealer reg-
istered’’. 
(2) Section 59A(h)(2)(B) is amended by striking 
‘‘section 
6038B(b)(2)’’ 
and 
inserting 
‘‘section 
6038A(b)(2)’’. 
(3) Section 59A(i)(2) is amended— 
(A) by striking ‘‘subsection (g)’’ and insert-
ing ‘‘subsection (h)’’, and 
(B) by striking ‘‘subsection (g)(3)’’ and in-
serting ‘‘subsection (h)(3)’’.
347 
† HR 1 EAS 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
PART IV—BUSINESS INTEREST LIMITATION 
SEC. 70341. COORDINATION OF BUSINESS INTEREST LIMI-
TATION 
WITH 
INTEREST 
CAPITALIZATION 
PROVISIONS. 
(a) IN GENERAL.—Section 163(j) is amended by redes-
ignating paragraphs (10) and (11) as paragraphs (11) and 
(12) and by inserting after paragraph (9) the following: 
‘‘(10) COORDINATION WITH INTEREST CAPITAL-
IZATION PROVISIONS.— 
‘‘(A) IN GENERAL.—In applying this sub-
section— 
‘‘(i) the limitation under paragraph 
(1) shall apply to business interest without 
regard to whether the taxpayer would other-
wise deduct such business interest or cap-
italize such business interest under an in-
terest capitalization provision, and 
‘‘(ii) any reference in this subsection to 
a deduction for business interest shall be 
treated as including a reference to the cap-
italization of business interest.
348 
† HR 1 EAS 
‘‘(B) AMOUNT ALLOWED APPLIED FIRST TO 
CAPITALIZED
INTEREST.—The amount allowed 
after taking into account the limitation described 
in paragraph (1)— 
‘‘(i) shall be applied first to the aggre-
gate amount of business interest which 
would otherwise be capitalized, and 
‘‘(ii) the remainder (if any) shall be 
applied to the aggregate amount of business 
interest which would be deducted. 
‘‘(C) TREATMENT OF DISALLOWED INTER-
EST
CARRIED
FORWARD.—No portion of any 
business interest carried forward under para-
graph (2) from any taxable year to any suc-
ceeding taxable year shall, for purposes of this 
title (including any interest capitalization provi-
sion which previously applied to such portion) be 
treated as interest to which an interest capital-
ization provision applies. 
‘‘(D) INTEREST
CAPITALIZATION
PROVI-
SION.—For purposes of this section, the term ‘in-
terest capitalization provision’ means any provi-
sion of this subtitle under which interest— 
‘‘(i) is required to be charged to capital 
account, or
349 
† HR 1 EAS 
‘‘(ii) may be deducted or charged to 
capital account.’’. 
(b) CERTAIN CAPITALIZED INTEREST NOT TREATED 
AS BUSINESS INTEREST.—Section 163(j)(5) is amended by 
adding at the end the following new sentence: ‘‘Such term 
shall not include any interest which is capitalized under 
section 263(g) or 263A(f).’’. 
(c) REGULATORY AUTHORITY.—Section 163(j), as 
amended by subsection (a), is amended by redesignating 
paragraphs (11) and (12) as paragraphs (12) and (13) and 
by inserting after paragraph (10) the following: 
‘‘(11) REGULATORY AUTHORITY.—The Secretary 
shall issue such regulations or guidance as may be 
necessary or appropriate to carry out the purposes of 
this subsection, including regulations or guidance to 
determine which business interest is taken into ac-
count under this subsection and section 59A(c)(3).’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70342. DEFINITION OF ADJUSTED TAXABLE INCOME 
FOR BUSINESS INTEREST LIMITATION. 
(a) IN
GENERAL.—Subparagraph (A) of section 
163(j)(8) is amended—
350 
† HR 1 EAS 
(1) by striking ‘‘and’’ at the end of clause (iv), 
and 
(2) by adding at the end the following new 
clause: 
‘‘(vi) the amounts included in gross in-
come under sections 951(a), 951A(a), and 
78 (and the portion of the deductions al-
lowed under sections 245A(a) (by reason of 
section 964(e)(4)) and 250(a)(1)(B) by rea-
son of such inclusions), and’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
PART V—OTHER INTERNATIONAL TAX REFORMS 
SEC. 70351. PERMANENT EXTENSION OF LOOK-THRU RULE 
FOR RELATED CONTROLLED FOREIGN COR-
PORATIONS. 
(a) IN GENERAL.—Section 954(c)(6)(C) is amended by 
striking ‘‘and before January 1, 2026,’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years of foreign corporations 
beginning after December 31, 2025.
351 
† HR 1 EAS 
SEC. 70352. REPEAL OF ELECTION FOR 1-MONTH DEFERRAL 
IN DETERMINATION OF TAXABLE YEAR OF 
SPECIFIED FOREIGN CORPORATIONS. 
(a) IN GENERAL.—Section 898(c) is amended by strik-
ing paragraph (2) and redesignating paragraph (3) as 
paragraph (2). 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years of specified foreign cor-
porations beginning after November 30, 2025. 
(c) TRANSITION RULE.— 
(1) IN GENERAL.—In the case of a corporation 
that is a specified foreign corporation as of November 
30, 2025, such corporation’s first taxable year begin-
ning after such date shall end at the same time as the 
first required year (within the meaning of section 
898(c)(1) of the Internal Revenue Code of 1986) end-
ing after such date. If any specified foreign corpora-
tion is required by the amendments made by this sec-
tion to change its taxable year for its first taxable 
year beginning after November 30, 2025— 
(A) such change shall be treated as initiated 
by such corporation, 
(B) such change shall be treated as having 
been made with the consent of the Secretary, and 
(C) the Secretary shall issue regulations or 
other guidance for allocating foreign taxes that
352 
† HR 1 EAS 
are paid or accrued in such first taxable year 
and the succeeding taxable year among such tax-
able years in the manner the Secretary deter-
mines appropriate to carry out the purposes of 
this section. 
(2) SECRETARY.—For purposes of this sub-
section, the term ‘‘Secretary’’ means the Secretary of 
the Treasury or the Secretary’s delegate. 
SEC. 70353. RESTORATION OF LIMITATION ON DOWNWARD 
ATTRIBUTION OF STOCK OWNERSHIP IN AP-
PLYING CONSTRUCTIVE OWNERSHIP RULES. 
(a) IN GENERAL.—Section 958(b) is amended— 
(1) by inserting after paragraph (3) the fol-
lowing: 
‘‘(4) Subparagraphs (A), (B), and (C) of section 
318(a)(3) shall not be applied so as to consider a 
United States person as owning stock which is owned 
by a person who is not a United States person.’’, and 
(2) by striking ‘‘Paragraph (1)’’ in the last sen-
tence and inserting ‘‘Paragraphs (1) and (4)’’. 
(b) FOREIGN CONTROLLED UNITED STATES SHARE-
HOLDERS.—Subpart F of part III of subchapter N of chap-
ter 1 is amended by inserting after section 951A the fol-
lowing new section:
353 
† HR 1 EAS 
‘‘SEC. 951B. AMOUNTS INCLUDED IN GROSS INCOME OF 
FOREIGN 
CONTROLLED 
UNITED 
STATES 
SHAREHOLDERS. 
‘‘(a) IN GENERAL.—In the case of any foreign con-
trolled United States shareholder of a foreign controlled for-
eign corporation— 
‘‘(1) this subpart (other than sections 951A, 
951(b), and 957) shall be applied with respect to such 
shareholder (separately from, and in addition to, the 
application of this subpart without regard to this sec-
tion)— 
‘‘(A) by substituting ‘foreign controlled 
United States shareholder’ for ‘United States 
shareholder’ each place it appears therein, and 
‘‘(B) by substituting ‘foreign controlled for-
eign corporation’ for ‘controlled foreign corpora-
tion’ each place it appears therein, and 
‘‘(2) section 951A (and such other provisions of 
this subpart as provided by the Secretary) shall be 
applied with respect to such shareholder— 
‘‘(A) by treating each reference to ‘United 
States shareholder’ in such section as including 
a reference to such shareholder, and 
‘‘(B) by treating each reference to ‘con-
trolled foreign corporation’ in such section as in-
354 
† HR 1 EAS 
cluding a reference to such foreign controlled for-
eign corporation. 
‘‘(b) FOREIGN CONTROLLED UNITED STATES SHARE-
HOLDER.—For purposes of this section, the term ‘foreign 
controlled United States shareholder’ means, with respect 
to any foreign corporation, any United States person which 
would be a United States shareholder with respect to such 
foreign corporation if— 
‘‘(1) section 951(b) were applied by substituting 
‘more than 50 percent’ for ‘10 percent or more’, and 
‘‘(2) section 958(b) were applied without regard 
to paragraph (4) thereof. 
‘‘(c) FOREIGN
CONTROLLED
FOREIGN
CORPORA-
TION.—For purposes of this section, the term ‘foreign con-
trolled foreign corporation’ means a foreign corporation, 
other than a controlled foreign corporation, which would 
be a controlled foreign corporation if section 957(a) were 
applied— 
‘‘(1) by substituting ‘foreign controlled United 
States shareholders’ for ‘United States shareholders’, 
and 
‘‘(2) by substituting ‘section 958(b) (other than 
paragraph (4) thereof)’ for ‘section 958(b)’. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary or
355 
† HR 1 EAS 
appropriate to carry out the purposes of this section, in-
cluding regulations or other guidance— 
‘‘(1) to treat a foreign controlled United States 
shareholder or a foreign controlled foreign corporation 
as a United States shareholder or as a controlled for-
eign corporation, respectively, for purposes of provi-
sions of this title other than this subpart (including 
any reporting requirement), and 
‘‘(2) with respect to the treatment of foreign con-
trolled foreign corporations that are passive foreign 
investment companies (as defined in section 1297).’’. 
(c) CLERICAL AMENDMENT.—The table of sections for 
subpart F of part III of subchapter N of chapter 1 is 
amended by inserting after the item relating to section 951A 
the following new item: 
‘‘Sec. 951B. Amounts included in gross income of foreign controlled United States 
shareholders.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years of foreign corporations 
beginning after December 31, 2025. 
(e) SPECIAL RULE.— 
(1) IN GENERAL.—Except to the extent provided 
by the Secretary of the Treasury (or the Secretary’s 
delegate), the effective date of any amendment to the 
Internal Revenue Code of 1986 shall be applied by 
treating references to United States shareholders as
356 
† HR 1 EAS 
including references to foreign controlled United 
States shareholders, and by treating references to con-
trolled foreign corporations as including references to 
foreign controlled foreign corporations. 
(2) DEFINITIONS.—Any term used in paragraph 
(1) which is used in subpart F of part III of sub-
chapter N of chapter 1 of the Internal Revenue Code 
of 1986 (as amended by this section) shall have the 
meaning given such term in such subpart. 
(f) NO INFERENCE.—The amendments made by this 
section shall not be construed to create any inference with 
respect to the proper application of any provision of the 
Internal Revenue Code of 1986 with respect to taxable years 
beginning before the taxable years to which such amend-
ments apply. 
SEC. 70354. MODIFICATIONS TO PRO RATA SHARE RULES. 
(a) IN GENERAL.—Subsection (a) of section 951 is 
amended to read as follows: 
‘‘(a) AMOUNTS INCLUDED.— 
‘‘(1) IN GENERAL.—If a foreign corporation is a 
controlled foreign corporation at any time during a 
taxable year of the foreign corporation (in this sub-
section referred to as the ‘CFC year’)— 
‘‘(A) each United States shareholder which 
owns (within the meaning of section 958(a))
357 
† HR 1 EAS 
stock in such corporation on any day during the 
CFC year shall include in gross income such 
shareholder’s pro rata share (determined under 
paragraph (2)) of the corporation’s subpart F 
income for the CFC year, and 
‘‘(B) each United States shareholder which 
owns (within the meaning of section 958(a)) 
stock in such corporation on the last day, in the 
CFC year, on which such corporation is a con-
trolled foreign corporation shall include in gross 
income the amount determined under section 956 
with respect to such shareholder for the CFC 
year (but only to the extent not excluded from 
gross income under section 959(a)(2)). 
‘‘(2) PRO RATA SHARE OF SUBPART F INCOME.— 
A United States shareholder’s pro rata share of a con-
trolled foreign corporation’s subpart F income for a 
CFC year shall be the portion of such income which 
is attributable to— 
‘‘(A) the stock of such corporation owned 
(within the meaning of section 958(a)) by such 
shareholder, and 
‘‘(B) any period of the CFC year during 
which—
358 
† HR 1 EAS 
‘‘(i) such shareholder owned (within 
the meaning of section 958(a)) such stock, 
‘‘(ii) such shareholder was a United 
States shareholder of such corporation, and 
‘‘(iii) such corporation was a con-
trolled foreign corporation. 
‘‘(3) 
TAXABLE
YEAR
OF
INCLUSION.—Any 
amount required to be included in gross income by a 
United States shareholder under paragraph (1) with 
respect to a CFC year shall be included in gross in-
come for the shareholder’s taxable year which includes 
the last day on which the shareholder owns (within 
the meaning of section 958(a)) stock in the controlled 
foreign corporation during such CFC year. 
‘‘(4) REGULATORY AUTHORITY.—The Secretary 
shall prescribe such regulations or other guidance as 
may be necessary or appropriate to carry out the 
purposes of this subsection, including regulations or 
other guidance allowing taxpayers to elect, or requir-
ing taxpayers, to close the taxable year of a controlled 
foreign corporation upon a direct or indirect disposi-
tion of stock of such corporation.’’. 
(b) COORDINATION WITH SECTION 951A.— 
(1) TESTED INCOME.—Section 951A(b), as redes-
ignated by section 70323(a)(2), is amended—
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† HR 1 EAS 
(A) in paragraph (1)(A), by striking ‘‘(de-
termined for each taxable year of such controlled 
foreign corporation which ends in or with such 
taxable year of such United States shareholder)’’, 
and 
(B) in paragraph (1)(B), by striking ‘‘(de-
termined for each taxable year of such controlled 
foreign corporation which ends in or with such 
taxable year of such United States shareholder)’’. 
(2) PRO RATA SHARE.—Section 951A(c), as re-
designated by section 70323(a)(2), is amended— 
(A) in paragraph (1), by striking ‘‘in which 
or with which the taxable year of the controlled 
foreign corporation ends’’ and inserting ‘‘deter-
mined under section 951(a)(3)’’, and 
(B) in paragraph (2), by striking ‘‘the last 
day in the taxable year of such foreign corpora-
tion on which such foreign corporation is a con-
trolled foreign corporation’’ and inserting ‘‘any 
day in such taxable year’’. 
(c) EFFECTIVE DATES.— 
(1) IN
GENERAL.—The amendments made by 
this section shall apply to taxable years of foreign cor-
porations beginning after December 31, 2025.
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† HR 1 EAS 
(2) TRANSITION RULE FOR DIVIDENDS.—Except 
to the extent provided by the Secretary of the Treas-
ury (or the Secretary’s delegate), a dividend paid (or 
deemed paid) by a controlled foreign corporation shall 
not be treated as a dividend for purposes of applying 
section 951(a)(2)(B) of the Internal Revenue Code of 
1986 (as in effect before the amendments made by this 
section) if— 
(A) such dividend— 
(i) was paid (or deemed paid) on or 
before June 28, 2025, during the taxable 
year of such controlled foreign corporation 
which includes such date and the United 
States shareholder described in section 
951(a)(1) of such Code (as so in effect) did 
not own (within the meaning of section 
958(a) of such Code) the stock of such con-
trolled foreign corporation during the por-
tion of such taxable year on or before June 
28, 2025, or 
(ii) was paid (or deemed paid) after 
June 28, 2025, and before such controlled 
foreign corporation’s first taxable year be-
ginning after December 31, 2025, and
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† HR 1 EAS 
(B) such dividend does not increase the tax-
able income of a United States person that is 
subject to Federal income tax for the taxable year 
(including by reason of a dividends received de-
duction, an exclusion from gross income, or an 
exclusion from subpart F income). 
CHAPTER 
4—INVESTING 
IN 
AMERICAN 
FAMILIES, COMMUNITIES, AND SMALL 
BUSINESSES 
Subchapter A—Permanent Investments in 
Families and Children 
SEC. 
70401. 
ENHANCEMENT 
OF 
EMPLOYER-PROVIDED 
CHILD CARE CREDIT. 
(a) INCREASE OF AMOUNT OF QUALIFIED CHILD CARE 
EXPENDITURES TAKEN INTO ACCOUNT.—Section 45F(a)(1) 
is amended by striking ‘‘25 percent’’ and inserting ‘‘40 per-
cent (50 percent in the case of an eligible small business)’’. 
(b) INCREASE OF MAXIMUM CREDIT AMOUNT.—Sub-
section (b) of section 45F is amended to read as follows: 
‘‘(b) DOLLAR LIMITATION.— 
‘‘(1) IN GENERAL.—The credit allowable under 
subsection (a) for any taxable year shall not exceed 
$500,000 ($600,000 in the case of an eligible small 
business).
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† HR 1 EAS 
‘‘(2) INFLATION
ADJUSTMENT.—In the case of 
any taxable year beginning after 2026, the $500,000 
and $600,000 amounts in paragraph (1) shall each be 
increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, determined by 
substituting ‘calendar year 2025’ for ‘calendar 
year 2016’ in subparagraph (A)(ii) thereof.’’. 
(c) ELIGIBLE SMALL BUSINESS.—Section 45F(c) is 
amended by adding at the end the following new paragraph: 
‘‘(4) ELIGIBLE SMALL BUSINESS.—The term ‘eli-
gible small business’ means a business that meets the 
gross receipts test of section 448(c), determined— 
‘‘(A) by substituting ‘5-taxable-year’ for ‘3- 
taxable-year’ in paragraph (1) thereof, and 
‘‘(B) by substituting ‘5-year’ for ‘3-year’ in 
paragraph (3)(A) thereof.’’. 
(d) CREDIT ALLOWED
FOR THIRD-PARTY INTER-
MEDIARIES.—Section 45F(c)(1)(A)(iii) is amended by in-
serting ‘‘, or under a contract with an intermediate entity 
that contracts with one or more qualified child care facili-
ties to provide such child care services’’ before the period 
at the end.
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† HR 1 EAS 
(e) TREATMENT OF JOINTLY OWNED OR OPERATED 
CHILD CARE FACILITY.—Section 45F(c)(2) is amended by 
adding at the end the following new subparagraph: 
‘‘(C) TREATMENT OF JOINTLY OWNED OR 
OPERATED
CHILD
CARE
FACILITY.—A facility 
shall not fail to be treated as a qualified child 
care facility of the taxpayer merely because such 
facility is jointly owned or operated by the tax-
payer and other persons.’’. 
(f) REGULATIONS AND GUIDANCE.—Section 45F is 
amended by adding at the end the following new subsection: 
‘‘(g) REGULATIONS AND GUIDANCE.—The Secretary 
shall issue such regulations or other guidance as may be 
necessary to carry out the purposes of this section, including 
guidance to carry out the purposes of paragraphs 
(1)(A)(iii) and (2)(C) of subsection (c).’’. 
(g) EFFECTIVE DATE.—The amendments made by this 
section shall apply to amounts paid or incurred after De-
cember 31, 2025. 
SEC. 70402. ENHANCEMENT OF ADOPTION CREDIT. 
(a) IN GENERAL.—Section 23(a) is amended by add-
ing at the end the following new paragraph: 
‘‘(4) PORTION
OF
CREDIT
REFUNDABLE.—So 
much of the credit allowed under paragraph (1) as 
does not exceed $5,000 shall be treated as a credit al-
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† HR 1 EAS 
lowed under subpart C and not as a credit allowed 
under this subpart.’’. 
(b) ADJUSTMENTS FOR INFLATION.—Section 23(h) is 
amended to read as follows: 
‘‘(h) ADJUSTMENTS FOR INFLATION.— 
‘‘(1) IN GENERAL.—In the case of a taxable year 
beginning after December 31, 2002, each of the dollar 
amounts in paragraphs (3) and (4) of subsection (a) 
and paragraphs (1) and (2)(A)(i) of subsection (b) 
shall be increased by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, determined by 
substituting ‘calendar year 2001’ for ‘calendar 
year 2016’ in subparagraph (A)(ii) thereof. 
‘‘(2) ROUNDING.—If any amount as increased 
under paragraph (1) is not a multiple of $10, such 
amount shall be rounded to the nearest multiple of 
$10. 
‘‘(3) SPECIAL
RULE
FOR
REFUNDABLE
POR-
TION.—In the case of the dollar amount in subsection 
(a)(4), paragraph (1) shall be applied— 
‘‘(A) by substituting ‘2025’ for ‘2002’ in the 
matter preceding subparagraph (A), and
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† HR 1 EAS 
‘‘(B) by substituting ‘calendar year 2024’ 
for ‘calendar year 2001’ in subparagraph (B) 
thereof.’’. 
(c) EXCLUSION OF REFUNDABLE PORTION OF CREDIT 
FROM CARRYFORWARD.—Section 23(c)(1) is amended by 
striking ‘‘credit allowable under subsection (a)’’ and insert-
ing ‘‘portion of the credit allowable under subsection (a) 
which is allowed under this subpart’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2024. 
SEC. 70403. RECOGNIZING INDIAN TRIBAL GOVERNMENTS 
FOR PURPOSES OF DETERMINING WHETHER 
A CHILD HAS SPECIAL NEEDS FOR PURPOSES 
OF THE ADOPTION CREDIT. 
(a) IN GENERAL.—Section 23(d)(3) is amended— 
(1) in subparagraph (A), by inserting ‘‘or In-
dian tribal government’’ after ‘‘a State’’, and 
(2) in subparagraph (B), by inserting ‘‘or In-
dian tribal government’’ after ‘‘such State’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2024.
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† HR 1 EAS 
SEC. 70404. ENHANCEMENT OF THE DEPENDENT CARE AS-
SISTANCE PROGRAM. 
(a) IN GENERAL.—Section 129(a)(2)(A) is amended 
by striking ‘‘$5,000 ($2,500’’ and inserting ‘‘$7,500 
($3,750’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
SEC. 70405. ENHANCEMENT OF CHILD AND DEPENDENT 
CARE TAX CREDIT. 
(a) IN GENERAL.—Paragraph (2) of section 21(a) is 
amended to read as follows: 
‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For 
purposes of paragraph (1), the term ‘applicable per-
centage’ means 50 percent— 
‘‘(A) reduced (but not below 35 percent) by 
1 percentage point for each $2,000 or fraction 
thereof by which the taxpayer’s adjusted gross in-
come for the taxable year exceeds $15,000, and 
‘‘(B) further reduced (but not below 20 per-
cent) by 1 percentage point for each $2,000 
($4,000 in the case of a joint return) or fraction 
thereof by which the taxpayer’s adjusted gross in-
come for the taxable year exceeds $75,000 
($150,000 in the case of a joint return).’’.
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† HR 1 EAS 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2025. 
Subchapter 
B—Permanent 
Investments 
in 
Students and Reforms to Tax-exempt In-
stitutions 
SEC. 70411. TAX CREDIT FOR CONTRIBUTIONS OF INDIVID-
UALS TO SCHOLARSHIP GRANTING ORGANI-
ZATIONS. 
(a) ALLOWANCE OF CREDIT FOR CONTRIBUTIONS OF 
INDIVIDUALS
TO
SCHOLARSHIP
GRANTING
ORGANIZA-
TIONS.— 
(1) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 is amended by inserting after 
section 25E the following new section: 
‘‘SEC. 25F. QUALIFIED ELEMENTARY AND SECONDARY EDU-
CATION SCHOLARSHIPS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi-
vidual who is a citizen or resident of the United States 
(within the meaning of section 7701(a)(9)), there shall be 
allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the aggregate 
amount of qualified contributions made by the taxpayer 
during the taxable year. 
‘‘(b) LIMITATIONS.—
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† HR 1 EAS 
‘‘(1) IN
GENERAL.—The credit allowed under 
subsection (a) to any taxpayer for any taxable year 
shall not exceed $1,700. 
‘‘(2) REDUCTION BASED ON STATE CREDIT.—The 
amount allowed as a credit under subsection (a) for 
a taxable year shall be reduced by the amount allowed 
as a credit on any State tax return of the taxpayer 
for qualified contributions made by the taxpayer dur-
ing the taxable year. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) COVERED STATE.—The term ‘covered State’ 
means one of the States, or the District of Columbia, 
that, for a calendar year, voluntarily elects to partici-
pate under this section and to identify scholarship 
granting organizations in the State, in accordance 
with subsection (g). 
‘‘(2) ELIGIBLE
STUDENT.—The term ‘eligible 
student’ means an individual who— 
‘‘(A) is a member of a household with an 
income which, for the calendar year prior to the 
date of the application for a scholarship, is not 
greater than 300 percent of the area median 
gross income (as such term is used in section 
42), and
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† HR 1 EAS 
‘‘(B) is eligible to enroll in a public elemen-
tary or secondary school. 
‘‘(3) 
QUALIFIED
CONTRIBUTION.—The 
term 
‘qualified contribution’ means a charitable contribu-
tion of cash to a scholarship granting organization 
that uses the contribution to fund scholarships for eli-
gible students solely within the State in which the or-
ganization is listed pursuant to subsection (g). 
‘‘(4) QUALIFIED
ELEMENTARY
OR
SECONDARY 
EDUCATION EXPENSE.—The term ‘qualified elemen-
tary or secondary education expense’ means any ex-
pense of an eligible student which is described in sec-
tion 530(b)(3)(A). 
‘‘(5) SCHOLARSHIP GRANTING ORGANIZATION.— 
The term ‘scholarship granting organization’ means 
any organization— 
‘‘(A) which— 
‘‘(i) is described in section 501(c)(3) 
and exempt from tax under section 501(a), 
and 
‘‘(ii) is not a private foundation, 
‘‘(B) which prevents the co-mingling of 
qualified contributions with other amounts by 
maintaining one or more separate accounts ex-
clusively for qualified contributions,
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† HR 1 EAS 
‘‘(C) which satisfies the requirements of sub-
section (d), and 
‘‘(D) which is included on the list submitted 
for the applicable covered State under subsection 
(g) for the applicable year. 
‘‘(d) REQUIREMENTS FOR SCHOLARSHIP GRANTING 
ORGANIZATIONS.— 
‘‘(1) IN GENERAL.—An organization meets the 
requirements of this subsection if— 
‘‘(A) such organization provides scholar-
ships to 10 or more students who do not all at-
tend the same school, 
‘‘(B) such organization spends not less than 
90 percent of the income of the organization on 
scholarships for eligible students, 
‘‘(C) such organization does not provide 
scholarships for any expenses other than quali-
fied elementary or secondary education expenses, 
‘‘(D) such organization provides a scholar-
ship to eligible students with a priority for— 
‘‘(i) students awarded a scholarship the 
previous school year, and 
‘‘(ii) after application of clause (i), 
any eligible students who have a sibling
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† HR 1 EAS 
who was awarded a scholarship from such 
organization, 
‘‘(E) such organization does not earmark or 
set aside contributions for scholarships on behalf 
of any particular student, and 
‘‘(F) such organization— 
‘‘(i) verifies the annual household in-
come and family size of eligible students 
who apply for scholarships to ensure such 
students meet the requirement of subsection 
(c)(2)(A), and 
‘‘(ii) limits the awarding of scholar-
ships to eligible students who are a member 
of a household for which the income does not 
exceed the amount established under sub-
section (c)(2)(A). 
‘‘(2) PROHIBITION ON SELF-DEALING.— 
‘‘(A) IN GENERAL.—A scholarship granting 
organization may not award a scholarship to 
any disqualified person. 
‘‘(B) DISQUALIFIED PERSON.—For purposes 
of this paragraph, a disqualified person shall be 
determined pursuant to rules similar to the rules 
of section 4946.
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† HR 1 EAS 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—Any qualified 
contribution for which a credit is allowed under this section 
shall not be taken into account as a charitable contribution 
for purposes of section 170. 
‘‘(f) CARRYFORWARD OF UNUSED CREDIT.— 
‘‘(1) IN GENERAL.—If the credit allowable under 
subsection (a) for any taxable year exceeds the limita-
tion imposed by section 26(a) for such taxable year 
reduced by the sum of the credits allowable under this 
subpart (other than this section, section 23, and sec-
tion 25D), such excess shall be carried to the suc-
ceeding taxable year and added to the credit allowable 
under subsection (a) for such taxable year. 
‘‘(2) LIMITATION.—No credit may be carried for-
ward under this subsection to any taxable year fol-
lowing the fifth taxable year after the taxable year in 
which the credit arose. For purposes of the preceding 
sentence, credits shall be treated as used on a first-in 
first-out basis. 
‘‘(g) STATE LIST OF SCHOLARSHIP GRANTING ORGA-
NIZATIONS.— 
‘‘(1) LIST.— 
‘‘(A) IN GENERAL.—Not later than January 
1 of each calendar year (or, with respect to the 
first calendar year for which this section applies,
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† HR 1 EAS 
as early as practicable), a State that voluntarily 
elects to participate under this section shall pro-
vide to the Secretary a list of the scholarship 
granting organizations that meet the require-
ments described in subsection (c)(5) and are lo-
cated in the State. 
‘‘(B) PROCESS.—The election under this 
paragraph shall be made by the Governor of the 
State or by such other individual, agency, or en-
tity as is designated under State law to make 
such elections on behalf of the State with respect 
to Federal tax benefits. 
‘‘(2) CERTIFICATION.—Each list submitted under 
paragraph (1) shall include a certification that the 
individual, agency, or entity submitting such list on 
behalf of the State has the authority to perform this 
function. 
‘‘(h) REGULATIONS AND GUIDANCE.—The Secretary 
shall issue such regulations or other guidance as the Sec-
retary determines necessary to carry out the purposes of this 
section, including regulations or other guidance— 
‘‘(1) providing for enforcement of the require-
ments under subsections (d) and (g), and
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† HR 1 EAS 
‘‘(2) with respect to recordkeeping or information 
reporting for purposes of administering the require-
ments of this section.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 25(e)(1)(C) is amended by 
striking ‘‘and 25D’’ and inserting ‘‘25D, and 
25F’’. 
(B) The table of sections for subpart A of 
part IV of subchapter A of chapter 1 is amended 
by inserting after the item relating to section 
25E the following new item: 
‘‘Sec. 25F. Qualified elementary and secondary education scholarships.’’. 
(b) EXCLUSION FROM GROSS INCOME FOR SCHOLAR-
SHIPS FOR QUALIFIED ELEMENTARY OR SECONDARY EDU-
CATION EXPENSES OF ELIGIBLE STUDENTS.— 
(1) IN GENERAL.—Part III of subchapter B of 
chapter 1 is amended by inserting before section 140 
the following new section: 
‘‘SEC. 139K. SCHOLARSHIPS FOR QUALIFIED ELEMENTARY 
OR SECONDARY EDUCATION EXPENSES OF 
ELIGIBLE STUDENTS. 
‘‘(a) IN GENERAL.—In the case of an individual, gross 
income shall not include any amounts provided to such in-
dividual or any dependent of such individual pursuant to 
a scholarship for qualified elementary or secondary edu-
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† HR 1 EAS 
cation expenses of an eligible student which is provided by 
a scholarship granting organization. 
‘‘(b) DEFINITIONS.—In this section, the terms ‘quali-
fied elementary or secondary education expense’, ‘eligible 
student’, and ‘scholarship granting organization’ have the 
same meaning given such terms under section 25F(c).’’. 
(2) CONFORMING AMENDMENT.—The table of sec-
tions for part III of subchapter B of chapter 1 is 
amended by inserting before the item relating to sec-
tion 140 the following new item: 
‘‘Sec. 139K. Scholarships for qualified elementary or secondary education ex-
penses of eligible students.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to taxable years ending after Decem-
ber 31, 2026. 
(2) EXCLUSION
FROM
GROSS
INCOME.—The 
amendments made by subsection (b) shall apply to 
amounts received after December 31, 2026, in taxable 
years ending after such date. 
SEC. 70412. EXCLUSION FOR EMPLOYER PAYMENTS OF STU-
DENT LOANS. 
(a) IN GENERAL.—Section 127(c)(1)(B) is amended by 
striking ‘‘in the case of payments made before January 1, 
2026,’’.
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† HR 1 EAS 
(b) INFLATION ADJUSTMENT.—Section 127 is amend-
ed— 
(1) by redesignating subsection (d) as subsection 
(e), and 
(2) by inserting after subsection (c) the following 
new subsection: 
‘‘(d) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning after 2026, both of the $5,250 amounts 
in subsection (a)(2) shall each be increased by an 
amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, determined by 
substituting ‘calendar year 2025’ for ‘calendar 
year 2016’ in subparagraph (A)(ii) thereof. 
‘‘(2) ROUNDING.—If any increase under para-
graph (1) is not a multiple of $50, such increase shall 
be rounded to the nearest multiple of $50.’’. 
(c) EFFECTIVE DATE.—The amendment made by this 
section shall apply to payments made after December 31, 
2025.