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HR 1 PCS
‘‘(D) such other requirements as may be 
established by the Secretary in regulations or 
other guidance are satisfied. 
‘‘(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— 
‘‘(A) such individual’s social security num-
ber, and 
‘‘(B) if the individual is married, the social 
security number of such individual’s spouse. 
‘‘(2) MARRIED INDIVIDUALS.—Rules similar to 
the rules of section 32(d) shall apply to this section. 
‘‘(3) SOCIAL
SECURITY
NUMBER
DEFINED.— 
For purposes of paragraph (1), the term ‘social se-
curity number’ shall have the meaning given such 
term in section 24(h)(7). 
‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
to prevent reclassification of income as qualified tips, in-
cluding regulations or other guidance to prevent abuse of 
the deduction allowed by this section. 
‘‘(f) TERMINATION.—No deduction shall be allowed 
under this section for any taxable year beginning after De-
cember 31, 2028.’’. 
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HR 1 PCS
(b) DEDUCTION ALLOWED
TO NON-ITEMIZERS.— 
Section 63(b) is amended by striking ‘‘and’’ at the end 
of paragraph (3), by striking the period at the end of para-
graph (4) and inserting ‘‘and’’, and by adding at the end 
the following new paragraph: 
‘‘(5) the deduction provided in section 224.’’. 
(c) OMISSION OF CORRECT SOCIAL SECURITY NUM-
BER
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 (V), by striking the 
period at the end of subparagraph (W) and inserting ‘‘, 
and’’, and by inserting after subparagraph (W) the fol-
lowing new subparagraph: 
‘‘(X) an omission of a correct social secu-
rity number required under section 224(d) (re-
lating 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 
section 224(a) for the taxable year.’’. 
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HR 1 PCS
(e) EXTENSION OF TIP CREDIT TO BEAUTY SERVICE 
BUSINESS.— 
(1) IN GENERAL.—Section 45B(b)(2) is amend-
ed to read as follows: 
‘‘(2) APPLICATION ONLY TO CERTAIN LINES OF 
BUSINESS.—In applying paragraph (1) there shall 
be taken into account only tips received from cus-
tomers or clients in connection with the following 
services: 
‘‘(A) The providing, delivering, or serving 
of food or beverages for consumption, if the tip-
ping of employees delivering or serving food or 
beverages 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 
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HR 1 PCS
(B) by inserting ‘‘, and in the case of food 
or beverage establishments, as in effect on Jan-
uary 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.— 
(A) STATEMENT
FURNISHED
TO
SEC-
RETARY.— Section 6041(a) is amended by in-
serting ‘‘(including a separate accounting of 
any such amounts properly designated as tips 
and whether such tips are received in an occu-
pation described in section 224(c)(1))’’ 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 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 compensation to non-employ-
ees, the portion of payments that have been properly 
designated as tips and whether such tips are re-
ceived in an occupation described in section 
224(c)(1).’’. 
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HR 1 PCS
(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 properly designated as tips 
and whether such tips are received in an occu-
pation described in section 224(c)(1))’’ 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) the portion of payments that have been 
properly designated as tips and whether such tips 
are received in an occupation described in section 
224(c)(1).’’. 
(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) 
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HR 1 PCS
and inserting ‘‘and’’, and by adding at the end 
the following new paragraph: 
‘‘(3) in the case of a third party settlement or-
ganization, the portion of reportable payment trans-
actions that have been properly designated by payors 
as tips and whether such tips are received in an oc-
cupation described in section 224(c)(1).’’. 
(B) STATEMENT FURNISHED TO PAYEE.— 
Section 6050W(f)(2) is amended by inserting 
‘‘(including a separate accounting of any such 
amounts that have been properly designated by 
payors as tips and whether such tips are re-
ceived in an occupation described in section 
224(c)(1))’’ after ‘‘reportable payment trans-
actions’’. 
(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 tips reported by the 
employee under section 6053(a).’’. 
(g) CLERICAL AMENDMENT.—The table of sections 
for part VII of subchapter B of chapter 1 is amended by 
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HR 1 PCS
redesignating the item relating to section 224 as relating 
to section 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 
Treasury (or the Secretary’s delegate) shall publish a list 
of occupations which traditionally and customarily re-
ceived tips on or before December 31, 2024, for purposes 
of section 224(c)(1) (as added by subsection (a)). 
(i) WITHHOLDING.—The Secretary of the Treasury 
(or the Secretary’s delegate) shall modify the tables and 
procedures prescribed under section 3402(a) to take into 
account the deduction allowed under section 224 (as added 
by this Act). 
(j) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
SEC. 110102. NO TAX ON OVERTIME. 
(a) DEDUCTION ALLOWED.—Part VII of subchapter 
B of chapter 1, as amended by the preceding provisions 
of this Act, is amended by redesignating section 225 as 
section 226 and by inserting after section 224 the fol-
lowing new section: 
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‘‘SEC. 225. QUALIFIED OVERTIME COMPENSATION. 
‘‘(a) IN GENERAL.—There shall be allowed as a de-
duction an amount equal to the qualified overtime com-
pensation received during the taxable year. 
‘‘(b) QUALIFIED OVERTIME COMPENSATION.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified overtime compensation’ 
means overtime compensation paid to an individual 
required under section 7 of the Fair Labor Stand-
ards Act of 1938 that is in excess of the regular rate 
(as used in such section) at which such individual is 
employed. 
‘‘(2) EXCLUSIONS.—Such term shall not in-
clude— 
‘‘(A) any qualified tip (as defined in sec-
tion 224(c)), or 
‘‘(B) any amount received by an individual 
during a taxable year if such individual is a 
highly compensated employee (as defined in sec-
tion 414(q)(1)) of any employer for the cal-
endar year in which the taxable year begins, or 
receives earned income in excess of the dollar 
amount in effect under section 414(q)(1)(B)(i) 
for such calendar year. 
‘‘(c) SOCIAL SECURITY NUMBER REQUIRED.— 
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‘‘(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— 
‘‘(A) such individual’s social security num-
ber, and 
‘‘(B) if the individual is married, the social 
security number of such individual’s spouse. 
‘‘(2) MARRIED INDIVIDUALS.—Rules similar to 
the rules of section 32(d) shall apply to this section. 
‘‘(3) SOCIAL
SECURITY
NUMBER
DEFINED.— 
For purposes of paragraph (1), the term ‘social se-
curity number’ shall have the meaning given such 
term in section 24(h)(7). 
‘‘(d) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out the purposes of this section. 
‘‘(e) 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.— 
Section 63(b), as amended by the preceding provisions of 
this Act, is amended by striking ‘‘and’’ at the end of para-
graph (4), by striking the period at the end of paragraph 
(5) and inserting ‘‘and’’, and by adding at the end the 
following new paragraph: 
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‘‘(6) the deduction provided in section 225.’’. 
(c) 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 striking the period 
at the end of paragraph (18) and inserting ‘‘, and’’, and 
by inserting after paragraph (18) the following new para-
graph: 
‘‘(19) the total amount of qualified overtime 
compensation (as defined in section 225(b)).’’. 
(d) OMISSION OF CORRECT SOCIAL SECURITY NUM-
BER
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 (W), by striking the 
period at the end of subparagraph (X) and inserting ‘‘, 
and’’, and by inserting after subparagraph (X) the fol-
lowing new subparagraph: 
‘‘(Y) an omission of a correct social secu-
rity number required under section 225(c) (re-
lating 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 re-
designating the item relating to section 225 as an item 
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HR 1 PCS
relating to section 226 and by inserting after the item re-
lating 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 tables and 
procedures prescribed under section 3402(a) to take into 
account the deduction allowed under section 225 (as added 
by this Act). 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
SEC. 110103. ENHANCED DEDUCTION FOR SENIORS. 
(a) IN GENERAL.—Section 63(f) is amended by add-
ing at the end the following new paragraph: 
‘‘(5) BONUS
ADDITIONAL
AMOUNT
FOR
SEN-
IORS.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning after December 31, 
2024, and before January 1, 2029, the dollar 
amount in effect under paragraph (1) shall be 
increased by $4,000. 
‘‘(B) LIMITATION
BASED
ON
MODIFIED 
ADJUSTED GROSS INCOME.—In the case of any 
taxpayer for any taxable year, the $4,000 
amount in subparagraph(A) shall be reduced 
(but not below zero) by 4 percent of so much 
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HR 1 PCS
of the taxpayer’s modified adjusted gross in-
come as exceeds $75,000 ($150,000 in the case 
of a joint return). 
‘‘(C) 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 taxable year increased by any amount ex-
cluded from gross income under section 911, 
931, or 933. 
‘‘(D) SOCIAL
SECURITY
NUMBER
RE-
QUIRED.— 
‘‘(i) IN GENERAL.—Subparagraph (A) 
shall not apply unless the taxpayer in-
cludes on the return of tax for the taxable 
year— 
‘‘(I) such individual’s social secu-
rity number, and 
‘‘(II) if the individual is married, 
the social security number of such in-
dividual’s spouse. 
‘‘(ii) MARRIED
INDIVIDUALS.—Rules 
similar to the rules of section 32(d) shall 
apply to this section. 
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‘‘(iii) SOCIAL SECURITY NUMBER DE-
FINED.—For purposes of clause (i), the 
term ‘social security number’ shall have 
the meaning given such term in section 
24(h)(7). 
‘‘(E) COORDINATION WITH INFLATION AD-
JUSTMENT.—Subsection (c)(4) shall not apply 
to any dollar amount contained in this para-
graph. 
‘‘(F) ALLOWANCE TO SENIORS WHO ELECT 
TO ITEMIZE.—In the case of a taxpayer who 
elects to itemize deductions for any taxable year 
beginning after December 31, 2024, and before 
January 1, 2029, there shall be allowed as a de-
duction the aggregate increase which would be 
determined under subparagraph (A) (deter-
mined after the application of subparagraphs 
(B), (D), and (E)) with respect to such tax-
payer for such taxable year if such taxpayer did 
not so elect to itemize deductions for such tax-
able year.’’. 
(b) OMISSION OF CORRECT SOCIAL SECURITY NUM-
BER
TREATED
AS
MATHEMATICAL
OR
CLERICAL 
ERROR.—Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended by striking 
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‘‘and’’ at the end of subparagraph (X), by striking the 
period at the end of subparagraph (Y) and inserting ‘‘, 
and’’, and by inserting after subparagraph (Y) the fol-
lowing new subparagraph: 
‘‘(Z) an omission of a correct social secu-
rity number required under section 63(f)(5)(D) 
(relating to bonus additional amount for sen-
iors).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
SEC. 110104. 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 PAS-
SENGER 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 
subsection the term ‘personal interest’ shall not 
include qualified passenger vehicle loan interest. 
‘‘(B) QUALIFIED
PASSENGER
VEHICLE 
LOAN INTEREST DEFINED.— 
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‘‘(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 
first lien on, an applicable passenger vehi-
cle 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 personal cash loan se-
cured by a vehicle previously pur-
chased by the taxpayer. 
‘‘(III) A loan incurred for the 
purchase of a commercial vehicle that 
is not used for personal purposes. 
‘‘(IV) Any lease financing. 
‘‘(V) A loan to finance the pur-
chase of a vehicle with a salvage title. 
‘‘(VI) A loan to finance the pur-
chase of a vehicle intended to be used 
for scrap or parts. 
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HR 1 PCS
‘‘(C) LIMITATIONS.— 
‘‘(i) DOLLAR LIMIT.—The amount of 
interest taken into account by a taxpayer 
under subparagraph (B) for any taxable 
year shall not exceed $10,000. 
‘‘(ii) LIMITATION
BASED
ON
MODI-
FIED 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 
(determined 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 thereof) 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 return). 
‘‘(II) 
MODIFIED
ADJUSTED 
GROSS INCOME.—For purposes of this 
clause, the term ‘modified adjusted 
gross income’ means the adjusted 
gross income of the taxpayer for the 
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HR 1 PCS
taxable year determined after applica-
tion of sections 86, 135, 137, 219, 
221, and 469, and without regard to 
this paragraph and sections 911, 931, 
and 933. 
‘‘(D) APPLICABLE PASSENGER VEHICLE.— 
The term ‘applicable passenger vehicle’ means 
any vehicle— 
‘‘(i)(I) which is manufactured pri-
marily for use on public streets, roads, and 
highways, 
‘‘(II) which has at least 2 wheels, and 
‘‘(III) which is a car, minivan, van, 
sport utility vehicle, pickup truck, or mo-
torcycle, 
‘‘(ii) which is an all-terrain vehicle 
(designed for use on land), or 
‘‘(iii) any trailer, camper, or vehicle 
(designed for use on land) which— 
‘‘(I) is designed to provide tem-
porary living quarters for recreational, 
camping, or seasonal use, and 
‘‘(II) is a motor vehicle or is de-
signed to be towed by, or affixed to, 
a motor vehicle. 
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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) 
ALL-TERRAIN
VEHICLE.—The 
term ‘all-terrain vehicle’ means any motor-
ized vehicle which has 3 or 4 wheels, a seat 
designed to be straddled by the operator, 
and handlebars for steering control. 
‘‘(ii) FINAL
ASSEMBLY.—For pur-
poses of subparagraph (D), the term ‘final 
assembly’ means the process by which a 
manufacturer produces a vehicle at, or 
through the use of, a plant, factory, or 
other place from which the vehicle is deliv-
ered to a dealer or importer with all com-
ponent parts necessary for the mechanical 
operation of the vehicle included with the 
vehicle, whether or not the component 
parts are permanently installed in or on 
the vehicle. 
‘‘(iii) 
TREATMENT
OF
REFI-
NANCING.—Indebtedness described in sub-
paragraph (B) shall include indebtedness 
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HR 1 PCS
that results from refinancing any indebted-
ness described in such subparagraph, and 
that is secured by a first lien on the appli-
cable passenger vehicle with respect to 
which the refinanced indebtedness was in-
curred, but only to the extent the amount 
of such resulting indebtedness does not ex-
ceed the amount of such refinanced indebt-
edness. 
‘‘(iv) RELATED
PARTIES.—Indebted-
ness described in subparagraph (B) shall 
not include any indebtedness owed to a 
person who is related (within the meaning 
of section 267(b) or 707(b)(1)) to the tax-
payer.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ITEMIZES.—Section 62(a) is amended by inserting 
after paragraph (21) the following new paragraph: 
‘‘(22) QUALIFIED PASSENGER VEHICLE LOAN 
INTEREST.—So much of the deduction allowed by 
section 163(a) as is attributable to the exception 
under section 163(h)(4)(A).’’. 
(c) REPORTING.— 
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(1) IN GENERAL.—Subpart B of part III of 
subchapter 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 busi-
ness, receives from any individual interest aggre-
gating $600 or more for any calendar year on a 
specified passenger vehicle loan, 
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, 
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‘‘(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, and model of the ap-
plicable passenger vehicle which secures such 
loan (or such other description of such vehicle 
as the Secretary may prescribe), and 
‘‘(F) such other information as the Sec-
retary may prescribe. 
‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID-
UALS WITH RESPECT TO WHOM INFORMATION IS RE-
QUIRED.—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 state-
ment 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 subpara-
graphs (B), (C), (D), and (E) of subsection (b)(2) 
with respect to such individual (and such informa-
tion as is described in subsection (b)(2)(F) with re-
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spect to such individual as the Secretary may pro-
vide 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 subsection (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 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 ap-
propriate to carry out the purposes of this section, includ-
ing regulations or other guidance to prevent the duplicate 
reporting of information under this section.’’. 
(2) PENALTIES.—Section 6724(d) is amend-
ed— 
(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’’, 
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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 
business from individuals), and’’, 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: 
‘‘(MM) section 6050AA(b) (relating to 
statements relating to applicable passenger ve-
hicle 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) Section 85 is amended by striking sub-
section (c). 
(3) Section 86(b)(2)(A) is amended by inserting 
‘‘163(h)(4),’’ after ‘‘137,’’. 
(4) Section 135(c)(4)(A) is amended by insert-
ing ‘‘163(h)(4),’’ after ‘‘137,’’. 
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(5) Section 137(b)(3)(A) is amended by insert-
ing ‘‘, 163(h)(4),’’ after ‘‘85(c)’’. 
(6) Section 219(g)(3)(A)(ii) is amended by in-
serting ‘‘163(h)(4),’’ after ‘‘137,’’. 
(7) Section 221(b)(1)(C)(i) is amended by in-
serting ‘‘, 163(h)(4),’’ after ‘‘85(c)’’. 
(8) Section 469(i)(3)(E)(iii) is amended by in-
serting ‘‘163(h)(4),’’ after ‘‘sections’’. 
(9) The table of sections for subpart B of part 
III of subchapter A of chapter 61 is amended by 
adding 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 De-
cember 31, 2024. 
SEC. 110105. 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 in-
serting ‘‘40 percent (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.— 
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‘‘(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). 
‘‘(2) INFLATION ADJUSTMENT.—In the case of 
any taxable year beginning after 2026, the 
$500,0000 and $600,000 amounts in paragraph (1) 
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, deter-
mined 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 para-
graph: 
‘‘(4) ELIGIBLE
SMALL
BUSINESS.—The term 
‘eligible small business’ means a business that meets 
the gross receipts test of section 448(c), deter-
mined— 
‘‘(A) by substituting ‘5-taxable-year’ for ‘3- 
taxable-year’ in paragraph (1) thereof, and 
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‘‘(B) by substituting ‘5-year’ for ‘3-year’ 
each place such term appears 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. 
(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 
taxpayer and other persons.’’. 
(f) REGULATIONS AND GUIDANCE.—Section 45F is 
amended by adding at the end the following new sub-
section: 
‘‘(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, includ-
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ing 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 
December 31, 2025. 
SEC. 110106. 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 insert-
ing 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 ei-
ther 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 
policy with regards to the provision of paid 
family and medical leave which is in force dur-
ing the taxable year, the applicable percentage 
of the total amount of premiums paid or in-
curred by such employer during such taxable 
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year with respect to such insurance policy.’’, 
and 
(B) by adding at the end the following: 
‘‘(3) RATE OF PAYMENT DETERMINED WITH-
OUT REGARD TO WHETHER LEAVE IS TAKEN.—For 
purposes of determining the applicable percentage 
with respect to paragraph (1)(B), the rate of pay-
ment under the insurance policy shall be determined 
without 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 
employer. 
‘‘(B) EXCEPTION.— 
‘‘(i) IN GENERAL.—Subparagraph (A) 
shall not apply to any person who estab-
lishes to the satisfaction of the Secretary 
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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 legiti-
mate business reason’ shall not include the 
operation of a separate line of business, 
the rate of wages or category of jobs for 
employees (or any similar basis), or the ap-
plication 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 
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‘‘(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’’, and 
(B) in paragraph (2)— 
(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 tax-
able year which is equal to that portion of the paid 
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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 
December 31, 2025. 
SEC. 110107. 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 
allowed 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 sub-
section (a) and paragraphs (1) and (2)(A)(i) of sub-
section (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 
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year in which the taxable year begins, deter-
mined 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 sub-
section (a)(4), paragraph (1) shall be applied— 
‘‘(A) by substituting ‘2025’ for ‘2002’ in 
the matter preceding subparagraph (A), and 
‘‘(B) by substituting ‘calendar year 2024’ 
for ‘calendar year 2001’ in subparagraph (B) 
thereof.’’. 
(c) EXCLUSION OF REFUNDABLE PORTION OF CRED-
IT FROM CARRYFORWARD.—Section 23(c)(1) is amended 
by striking ‘‘credit allowable under subsection (a)’’ and in-
serting ‘‘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 
December 31, 2024. 
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SEC. 110108. 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 
December 31, 2024. 
SEC. 110109. SCHOLARSHIP GRANTING ORGANIZATIONS. 
(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 in-
dividual, 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. 
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‘‘(b) LIMITATIONS.— 
‘‘(1) IN GENERAL.—The credit allowed under 
subsection (a) to any taxpayer for any taxable year 
shall not exceed an amount equal to the greater of— 
‘‘(A) 10 percent of the adjusted gross in-
come of the taxpayer for the taxable year, or 
‘‘(B) $5,000. 
‘‘(2) ALLOCATION OF VOLUME CAP.—The credit 
allowed under subsection (a) to any taxpayer for any 
taxable year shall not exceed the amount of the vol-
ume cap allocated by the Secretary to such taxpayer 
under subsection (g) with respect to qualified con-
tributions made by the taxpayer during the taxable 
year. 
‘‘(3) 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 tax-
payer during the taxable year. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE STUDENT.—The term ‘eligible 
student’ means an individual who— 
‘‘(A) is a member of a household with an 
income which is not greater than 300 percent 
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of the area median gross income (as such term 
is used in section 42), and 
‘‘(B) is eligible to enroll in a public ele-
mentary or secondary school. 
‘‘(2) QUALIFIED
CONTRIBUTION.—The term 
‘qualified contribution’ means a charitable contribu-
tion (as defined by section 170(c)) to a scholarship 
granting organization in the form of cash or market-
able securities. 
‘‘(3) QUALIFIED ELEMENTARY OR SECONDARY 
EDUCATION EXPENSE.—The term ‘qualified elemen-
tary or secondary education expense’ means the fol-
lowing expenses in connection with enrollment or at-
tendance at, or for students enrolled at or attending, 
an elementary or secondary public, private, or reli-
gious school: 
‘‘(A) Tuition. 
‘‘(B) Curriculum and curricular materials. 
‘‘(C) Books or other instructional mate-
rials. 
‘‘(D) Online educational materials. 
‘‘(E) Tuition for tutoring or educational 
classes outside of the home, including at a tu-
toring facility, but only if the tutor or instruc-
tor is not related to the student and— 
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‘‘(i) is licensed as a teacher in any 
State, 
‘‘(ii) has taught at an eligible edu-
cational institution, or 
‘‘(iii) is a subject matter expert in the 
relevant subject. 
‘‘(F) Fees for a nationally standardized 
norm-referenced achievement test, an advanced 
placement examination, or any examinations re-
lated to college or university admission. 
‘‘(G) Fees for dual enrollment in an insti-
tution of higher education. 
‘‘(H) Educational therapies for students 
with disabilities provided by a licensed or ac-
credited practitioner or provider, including oc-
cupational, behavioral, physical, and speech-lan-
guage therapies. 
Such term shall include expenses for the purposes 
described in subparagraphs (A) through (H) in con-
nection with a homeschool (whether treated as a 
homeschool or a private school for purposes of appli-
cable State law). No amount paid to an elementary 
or secondary school shall be considered a qualified 
elementary or secondary education expense for the 
purposes of this section unless such school dem-
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onstrates that it maintains a policy whereby its ad-
missions standards do not take into account whether 
the student seeking enrollment has a current individ-
ualized education plan, nor takes into account that 
the student requires equitable services for a learning 
disability, and if a student does have such an indi-
vidualized education plan, the school abides by the 
plan’s terms and provides services outlined therein. 
‘‘(4) 
SCHOLARSHIP
GRANTING
ORGANIZA-
TION.—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) substantially all of the activities of 
which are providing scholarships for qualified 
elementary or secondary education expenses of 
eligible students, 
‘‘(C) which prevents the co-mingling of 
qualified contributions with other amounts by 
maintaining one or more separate accounts ex-
clusively for qualified contributions, and 
‘‘(D) which either— 
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‘‘(i) meets the requirements of sub-
section (d), or 
‘‘(ii) pursuant to State law, was able 
(as of the date of the enactment of this 
section) to receive contributions that are 
eligible for a State tax credit if such con-
tributions are used by the organization to 
provide scholarships to individual elemen-
tary and secondary students, including 
scholarships for attending private schools. 
‘‘(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 2 or more students, provided that not 
all such students attend the same school, 
‘‘(B) such organization does not provide 
scholarships for any expenses other than quali-
fied elementary or secondary education ex-
penses, 
‘‘(C) such organization provides a scholar-
ship to eligible students with a priority for— 
‘‘(i) students awarded a scholarship 
the previous school year, and 
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‘‘(ii) after application of clause (i), 
any such students who have a sibling who 
was awarded a scholarship from such orga-
nization, 
‘‘(D) such organization does not earmark 
or set aside contributions for scholarships on 
behalf of any particular student, 
‘‘(E) such organization takes appropriate 
steps to verify the annual household income and 
family size of eligible students to whom it 
awards scholarships, and limits them to a mem-
ber of a household for which the income does 
not exceed the amount established under sub-
section (c)(1)(A), 
‘‘(F) such organization— 
‘‘(i) obtains from an independent cer-
tified public accountant annual financial 
and compliance audits, and 
‘‘(ii) certifies to the Secretary (at such 
time, and in such form and manner, as the 
Secretary may prescribe) that the audit de-
scribed in clause (i) has been completed, 
and 
‘‘(G) no officer or board member of such 
organization has been convicted of a felony. 
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HR 1 PCS
‘‘(2) INCOME VERIFICATION.—For purposes of 
paragraph (1)(E), review of all of the following (as 
applicable) shall be treated as satisfying the require-
ment to take appropriate steps to verify annual 
household income: 
‘‘(A) Federal and State income tax returns 
or tax return transcripts with applicable sched-
ules for the taxable year prior to application. 
‘‘(B) Income reporting statements for tax 
purposes or wage and income transcripts from 
the Internal Revenue Service. 
‘‘(C) Notarized income verification letter 
from employers. 
‘‘(D) Unemployment or workers compensa-
tion statements. 
‘‘(E) Budget letters regarding public as-
sistance payments and Supplemental Nutrition 
Assistance Program (SNAP) payments includ-
ing a list of household members. 
‘‘(3) INDEPENDENT
CERTIFIED
PUBLIC
AC-
COUNTANT.—For purposes of paragraph (1)(F), the 
term 
‘independent 
certified 
public 
accountant’ 
means, with respect to an organization, a certified 
public accountant who is not a person described in 
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HR 1 PCS
section 465(b)(3)(A) with respect to such organiza-
tion or any employee of such organization. 
‘‘(4) PROHIBITION ON SELF-DEALING.— 
‘‘(A) IN GENERAL.—A scholarship grant-
ing organization may not award a scholarship 
to any disqualified person. 
‘‘(B) DISQUALIFIED
PERSON.—For pur-
poses of this paragraph, a disqualified person 
shall be determined pursuant to rules similar to 
the rules of section 4946. 
‘‘(e) DENIAL OF DOUBLE BENEFIT.—Any qualified 
contribution for which a credit is allowed under this sec-
tion shall not be taken into account as a charitable con-
tribution 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 limitation imposed by section 26(a) for such tax-
able year reduced by the sum of the credits allowable 
under this subpart (other than this section, section 
23, and section 25D), such excess shall be carried to 
the succeeding taxable year and added to the credit 
allowable under subsection (a) for such taxable year. 
‘‘(2) LIMITATION.—No credit may be carried 
forward under this subsection to any taxable year 
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following the fifth taxable year after the taxable year 
in which the credit arose. For purposes of the pre-
ceding sentence, credits shall be treated as used on 
a first-in first-out basis. 
‘‘(g) VOLUME CAP.— 
‘‘(1) IN GENERAL.—The volume cap applicable 
under this section shall be $5,000,000,000 for each 
of calendar years 2026 through 2029, and zero for 
calendar years thereafter. Such amount shall be allo-
cated by the Secretary as provided in paragraph (2) 
to taxpayers with respect to qualified contributions 
made by such taxpayers, except that 10 percent of 
such amount shall be divided evenly among the 
States, and shall be available with respect to individ-
uals residing in such States. 
‘‘(2) FIRST-COME, FIRST-SERVE.—For purposes 
of applying the volume cap under this section, such 
volume cap for any calendar year shall be allocated 
by the Secretary on a first-come, first-serve basis, as 
determined based on the time (during such calendar 
year) at which the taxpayer made the qualified con-
tribution with respect to which the allocation is 
made. The Secretary shall not make any allocation 
of volume cap for any calendar year after December 
31 of such calendar year. 
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‘‘(3) REAL-TIME INFORMATION.—For purposes 
of this section, the Secretary shall develop a system 
to track the amount of qualified contributions made 
during the calendar year for which a credit may be 
claimed under this section, with such information to 
be updated in real time. 
‘‘(4) ANNUAL INCREASES.— 
‘‘(A) IN GENERAL.—In the case of the cal-
endar year after a high-use calendar year, the 
dollar amount otherwise in effect under para-
graph (1) for such calendar year shall be equal 
to 105 percent of the dollar amount in effect 
for such high-use calendar year. 
‘‘(B) HIGH-USE
CALENDAR
YEAR.—For 
purposes of this subsection, the term ‘high-use 
calendar year’ means any calendar year for 
which 90 percent or more of the volume cap in 
effect for such calendar year under paragraph 
(1) is allocated to taxpayers. 
‘‘(C) PREVENTION OF DECREASES IN AN-
NUAL VOLUME CAP.—The volume cap in effect 
under paragraph (1) for any calendar year shall 
not be less than the volume cap in effect under 
such paragraph for the preceding calendar year. 
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‘‘(D) PUBLICATION OF ANNUAL VOLUME 
CAP.—The Secretary shall make publicly avail-
able the dollar amount of the volume cap in ef-
fect under paragraph (1) for each calendar 
year. 
‘‘(5) STATES.—For purposes of this subsection, 
the term ‘State’ includes the District of Columbia.’’. 
(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 amend-
ed by inserting after the item relating to section 
25E the following new item: 
‘‘Sec. 25F. Qualified elementary and secondary education scholarships.’’. 
(b) EXEMPTION FROM GROSS INCOME FOR SCHOL-
ARSHIPS FOR QUALIFIED ELEMENTARY OR SECONDARY 
EDUCATION 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: 
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‘‘SEC. 139J. 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 
any dependent of such individual pursuant to a scholar-
ship for qualified elementary or secondary education ex-
penses of an eligible student which is provided by a schol-
arship 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). 
‘‘(c) TERMINATION.—Subsection (a) shall not apply 
to amounts received after December 31, 2029.’’. 
(2) CONFORMING AMENDMENT.—The table of 
sections for part III of subchapter B of chapter 1 
is amended by inserting before the item relating to 
section 140 the following new item: 
‘‘Sec. 139J. Scholarships for qualified elementary or secondary education ex-
penses of eligible students.’’. 
(c) FAILURE OF SCHOLARSHIP GRANTING ORGANI-
ZATIONS TO MAKE DISTRIBUTIONS.— 
(1) IN GENERAL.—Chapter 42 is amended by 
adding at the end the following new subchapter: 
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‘‘Subchapter I—Scholarship Granting 
Organizations 
‘‘Sec. 4969. Failure to distribute receipts. 
‘‘SEC. 4969. FAILURE TO DISTRIBUTE RECEIPTS. 
‘‘(a) IN GENERAL.—In the case of any scholarship 
granting organization (as defined in section 25F) which 
has been determined by the Secretary to have failed to 
satisfy the requirement under subsection (b) for any tax-
able year, any contribution made to such organization dur-
ing the first taxable year beginning after the date of such 
determination shall not be treated as a qualified contribu-
tion (as defined in section 25F(c)(2)) for purposes of sec-
tion 25F. 
‘‘(b) REQUIREMENT.—The requirement described in 
this subsection is that the amount of receipts of the schol-
arship granting organization for the taxable year which 
are distributed before the distribution deadline with re-
spect to such receipts shall not be less than the required 
distribution amount with respect to such taxable year. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) REQUIRED DISTRIBUTION AMOUNT.— 
‘‘(A) IN GENERAL.—The required distribu-
tion amount with respect to a taxable year is 
the amount equal to 100 percent of the total re-
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ceipts of the scholarship granting organization 
for such taxable year— 
‘‘(i) reduced by the sum of such re-
ceipts that are retained for reasonable ad-
ministrative expenses for the taxable year 
or are carried to the succeeding taxable 
year under subparagraph (C), and 
‘‘(ii) increased by the amount of the 
carryover under subparagraph (C) from 
the preceding taxable year. 
‘‘(B) SAFE HARBOR FOR REASONABLE AD-
MINISTRATIVE
EXPENSES.—For purposes of 
subparagraph (A)(i), if the percentage of total 
receipts of a scholarship granting organization 
for a taxable year which are used for adminis-
trative purposes is equal to or less than 10 per-
cent, such expenses shall be deemed to be rea-
sonable for purposes of such subparagraph. 
‘‘(C) CARRYOVER.—With respect to the 
amount of the total receipts of a scholarship 
granting organization with respect to any tax-
able year, an amount not greater than 15 per-
cent of such amount may, at the election of 
such organization, be carried to the succeeding 
taxable year. 
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‘‘(2) DISTRIBUTIONS.—The term ‘distribution’ 
includes amounts which are formally committed but 
not distributed. A formal commitment described in 
the preceding sentence may include contributions set 
aside for eligible students for more than one year. 
‘‘(3) DISTRIBUTION DEADLINE.—The distribu-
tion deadline with respect to receipts for a taxable 
year is the first day of the third taxable year fol-
lowing the taxable year in which such receipts are 
received by the scholarship granting organization.’’. 
(2) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 42 is amended by adding at the 
end the following new item: 
‘‘SUBCHAPTER I—SCHOLARSHIP GRANTING ORGANIZATIONS’’. 
(d) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to taxable years ending after 
December 31, 2025. 
(2) EXEMPTION
FROM
GROSS
INCOME.—The 
amendments made by subsection (b) shall apply to 
amounts received after December 31, 2025, in tax-
able years ending after such date. 
(e) ORGANIZATIONAL AND PARENTAL AUTONOMY.— 
(1) PROHIBITION OF CONTROL OVER SCHOLAR-
SHIP ORGANIZATIONS.— 
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(A) IN GENERAL.— 
(i) 
TREATMENT.—A 
scholarship 
granting organization shall not, by virtue 
of participation under any provision of this 
section or any amendment made by this 
section, be regarded as acting on behalf of 
any governmental entity. 
(ii) NO GOVERNMENTAL CONTROL.— 
Nothing in this section, or any amendment 
made by this section, shall be construed to 
permit, allow, encourage, or authorize any 
Federal, State, or local government entity, 
or officer or employee thereof, to mandate, 
direct, or control any aspect of any schol-
arship granting organization. 
(iii) MAXIMUM FREEDOM.—To the ex-
tent permissible by law, this section, and 
any amendment made by this section, shall 
be construed to allow scholarship granting 
organizations maximum freedom to provide 
for the needs of the participants without 
governmental control. 
(B) PROHIBITION OF CONTROL OVER NON- 
PUBLIC SCHOOLS.— 
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(i) NO
GOVERNMENTAL
CONTROL.— 
Nothing in this section, or any amendment 
made by this section, shall be construed to 
permit, allow, encourage, or authorize any 
Federal, State, or local government entity, 
or officer or employee thereof, to mandate, 
direct, or control any aspect of any private 
or religious elementary or secondary edu-
cation institution. 
(ii) NO EXCLUSION OF PRIVATE OR 
RELIGIOUS SCHOOLS.—No Federal, State, 
or local government entity, or officer or 
employee thereof, shall impose or permit 
the imposition of any conditions or require-
ments that would exclude or operate to ex-
clude educational expenses at private or re-
ligious elementary and secondary education 
institutions from being considered qualified 
elementary or secondary education ex-
penses. 
(iii) NO
EXCLUSION
OF
QUALIFIED 
EXPENSES
DUE
TO
INSTITUTION’S
RELI-
GIOUS CHARACTER OR AFFILIATION.—No 
Federal, State, or local government entity, 
or officer or employee thereof, shall ex-
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HR 1 PCS
clude, discriminate against, or otherwise 
disadvantage any elementary or secondary 
education institution with respect to quali-
fied elementary or secondary education ex-
penses at that institution based in whole or 
in part on the institution’s religious char-
acter or affiliation, including religiously 
based or mission-based policies or prac-
tices. 
(C) PARENTAL RIGHTS TO USE SCHOLAR-
SHIPS.—No Federal, State, or local government 
entity, or officer or employee thereof, shall dis-
favor or discourage the use of scholarships 
granted by participating scholarship granting 
organizations for qualified elementary or sec-
ondary education expenses at private or non-
profit elementary and secondary education in-
stitutions, including faith-based schools. 
(D) PARENTAL RIGHT TO INTERVENE.—In 
any action filed in any State or Federal court 
which challenges the constitutionality (under 
the constitution of such State or the Constitu-
tion of the United States) of any provision of 
this section (or any amendment made by this 
section), any parent of an eligible student who 
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has received a scholarship from a scholarship 
granting organization shall have the right to in-
tervene in support of the constitutionality of 
such provision or amendment. To avoid duplica-
tion of efforts and reduce the burdens placed on 
the parties to the action, the court in any such 
action may require interveners taking similar 
positions to file joint papers or to be rep-
resented by a single attorney at oral argument, 
provided that the court does not require such 
interveners to join any brief filed on behalf of 
any State which is a defendant in such action. 
(2) DEFINITIONS.—For purposes of this sub-
section, the terms ‘‘eligible student’’, ‘‘scholarship 
granting organization’’, and ‘‘qualified elementary or 
secondary education expense’’ shall have the same 
meanings given such terms under section 25F(c) of 
the Internal Revenue Code of 1986 (as added by 
this Act). 
SEC. 110110. ADDITIONAL ELEMENTARY, SECONDARY, AND 
HOME 
SCHOOL 
EXPENSES 
TREATED 
AS 
QUALIFIED HIGHER EDUCATION EXPENSES 
FOR PURPOSES OF 529 ACCOUNTS. 
(a) IN GENERAL.—Section 529(c)(7) is amended to 
read as follows: 
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‘‘(7) TREATMENT OF ELEMENTARY AND SEC-
ONDARY TUITION.—Any reference in this section to 
the term ‘qualified higher education expense’ shall 
include a reference to the following expenses in con-
nection with enrollment or attendance at, or for stu-
dents enrolled at or attending, an elementary or sec-
ondary public, private, or religious school: 
‘‘(A) Tuition. 
‘‘(B) Curriculum and curricular materials. 
‘‘(C) Books or other instructional mate-
rials. 
‘‘(D) Online educational materials. 
‘‘(E) Tuition for tutoring or educational 
classes outside of the home, including at a tu-
toring facility, but only if the tutor or instruc-
tor is not related to the student and— 
‘‘(i) is licensed as a teacher in any 
State, 
‘‘(ii) has taught at an eligible edu-
cational institution, or 
‘‘(iii) is a subject matter expert in the 
relevant subject. 
‘‘(F) Fees for a nationally standardized 
norm-referenced achievement test, an advanced 
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placement examination, or any examinations re-
lated to college or university admission. 
‘‘(G) Fees for dual enrollment in an insti-
tution of higher education. 
‘‘(H) Educational therapies for students 
with disabilities provided by a licensed or ac-
credited practitioner or provider, including oc-
cupational, behavioral, physical, and speech-lan-
guage therapies. 
Such term shall include expenses for the purposes 
described in subparagraphs (A) through (H) in con-
nection with a homeschool (whether treated as a 
homeschool or a private school for purposes of appli-
cable State law).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions made after the 
date of the enactment of this Act. 
SEC. 110111. CERTAIN POSTSECONDARY CREDENTIALING 
EXPENSES TREATED AS QUALIFIED HIGHER 
EDUCATION EXPENSES FOR PURPOSES OF 
529 ACCOUNTS. 
(a) IN GENERAL.—Section 529(e)(3) is amended by 
adding at the end the following new subparagraph: 
‘‘(C) 
CERTAIN
POSTSECONDARY 
CREDENTIALING EXPENSES.—The term ‘quali-
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fied higher education expenses’ includes quali-
fied postsecondary credentialing expenses (as 
defined in subsection (f)).’’. 
(b) QUALIFIED POSTSECONDARY CREDENTIALING 
EXPENSES.—Section 529 is amended by redesignating 
subsection (f) as subsection (g) and by inserting after sub-
section (e) the following new subsection: 
‘‘(f) QUALIFIED POSTSECONDARY CREDENTIALING 
EXPENSES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified post-
secondary credentialing expenses’ means— 
‘‘(A) tuition, fees, books, supplies, and 
equipment required for the enrollment or at-
tendance of a designated beneficiary in a recog-
nized postsecondary credential program, or any 
other expense incurred in connection with en-
rollment in or attendance at a recognized post-
secondary credential program if such expense 
would, if incurred in connection with enrollment 
or attendance at an eligible educational institu-
tion, be covered under subsection (e)(3)(A), 
‘‘(B) fees for testing if such testing is re-
quired to obtain or maintain a recognized post-
secondary credential, and 
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‘‘(C) fees for continuing education if such 
education is required to maintain a recognized 
postsecondary credential. 
‘‘(2) RECOGNIZED
POSTSECONDARY
CREDEN-
TIAL
PROGRAM.—The term ‘recognized postsec-
ondary credential program’ means any program to 
obtain a recognized postsecondary credential if— 
‘‘(A) such program is included on a State 
list prepared under section 122(d) of the Work-
force Innovation and Opportunity Act (29 
U.S.C. 3152(d)), 
‘‘(B) such program is listed in the 
WEAMS Public directory (or successor direc-
tory) maintained by the Department of Vet-
erans Affairs, 
‘‘(C) an examination (developed or admin-
istered by an organization widely recognized as 
providing reputable credentials in the occupa-
tion) is required to obtain or maintain such cre-
dential and such organization recognizes such 
program as providing training or education 
which prepares individuals to take such exam-
ination, or 
‘‘(D) such program is identified by the 
Secretary, after consultation with the Secretary 
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of Labor, as being a reputable program for ob-
taining a recognized postsecondary credential 
for purposes of this subsection. 
‘‘(3) RECOGNIZED
POSTSECONDARY
CREDEN-
TIAL.—The term ‘recognized postsecondary creden-
tial’ means— 
‘‘(A) any postsecondary employment cre-
dential that is industry recognized, including— 
‘‘(i) any postsecondary employment 
credential issued by a program that is ac-
credited by the Institute for Credentialing 
Excellence, the National Commission on 
Certifying Agencies, or the American Na-
tional Standards Institute, 
‘‘(ii) any postsecondary employment 
credential 
that 
is 
included 
in 
the 
Credentialing 
Opportunities 
On-Line 
(COOL) directory of credentialing pro-
grams (or successor directory) maintained 
by the Department of Defense or by any 
branch of the Armed Services, and 
‘‘(iii) any postsecondary employment 
credential identified for purposes of this 
clause by the Secretary, after consultation 
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with the Secretary of Labor, as being in-
dustry recognized, 
‘‘(B) any certificate of completion of an 
apprenticeship that is registered and certified 
with the Secretary of Labor under the National 
Apprenticeship Act (29 U.S.C. 50), 
‘‘(C) any occupational or professional li-
cense issued or recognized by a State or the 
Federal Government (and any certification that 
satisfies a condition for obtaining such a li-
cense), and 
‘‘(D) any recognized postsecondary creden-
tial as defined in section 3 of the Workforce In-
novation and Opportunity Act (29 U.S.C. 
3102).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made after the 
date of the enactment of this Act. 
SEC. 110112. REINSTATEMENT OF PARTIAL DEDUCTION 
FOR CHARITABLE CONTRIBUTIONS OF INDI-
VIDUALS WHO DO NOT ELECT TO ITEMIZE. 
(a) IN GENERAL.—Section 170(p) is amended— 
(1) by striking ‘‘$300 ($600’’ and inserting 
‘‘$150 ($300’’, and 
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(2) by striking ‘‘in 2021’’ and inserting ‘‘after 
December 31, 2024, and before January 1, 2029’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
SEC. 110113. EXCLUSION FOR CERTAIN EMPLOYER PAY-
MENTS OF STUDENT LOANS UNDER EDU-
CATIONAL 
ASSISTANCE 
PROGRAMS 
MADE 
PERMANENT AND ADJUSTED FOR INFLATION. 
(a) IN GENERAL.—Section 127(c)(1)(B) is amended 
by striking ‘‘in the case of payments made before January 
1, 2026,’’. 
(b) INFLATION
ADJUSTMENT.—Section 127 is 
amended— 
(1) by redesignating subsection (d) as sub-
section (e), and 
(2) by inserting after subsection (c) the fol-
lowing 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 be increased by 
an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
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‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year in which the taxable year begins, deter-
mined 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. 
SEC. 110114. EXTENSION OF RULES FOR TREATMENT OF 
CERTAIN 
DISASTER-RELATED 
PERSONAL 
CASUALTY LOSSES. 
For purposes of applying section 304(b) of the Tax-
payer Certainty and Disaster Tax Relief Act of 2020 (divi-
sion EE of Public Law 116–260), section 301 of such Act 
shall be applied by substituting the date of the enactment 
of this section for ‘‘the date of the enactment of this Act’’ 
each place it appears. 
SEC. 110115. TRUMP ACCOUNTS. 
(a) IN GENERAL.—Subchapter F of chapter 1 is 
amended by adding at the end the following new part: 
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‘‘PART IX—TRUMP ACCOUNTS 
‘‘SEC. 530A. TRUMP ACCOUNTS. 
‘‘(a) GENERAL RULE.—A Trump account shall be ex-
empt from taxation under this subtitle. Notwithstanding 
the preceding sentence, such account shall be subject to 
the taxes imposed by section 511 (relating to imposition 
of tax on unrelated business income of charitable organiza-
tions). 
‘‘(b) TRUMP ACCOUNT.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘Trump account’ 
means a trust created or organized in the United 
States for the exclusive benefit of an individual and 
which is designated (in such manner as the Sec-
retary shall prescribe) at the time of the establish-
ment of the trust as a Trump account, but only if 
the written governing instrument creating the trust 
meets the following requirements: 
‘‘(A) The individual establishing the ac-
count shall provide to the trustee the social se-
curity number of such individual and of the ac-
count beneficiary. 
‘‘(B) Except in the case of a qualified roll-
over contribution described in subsection (e), no 
contribution will be accepted— 
‘‘(i) before January 1, 2026, 
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‘‘(ii) unless it is in cash, 
‘‘(iii) unless the account beneficiary 
has not attained age 18, and 
‘‘(iv) if such contribution would result 
in aggregate contributions for the taxable 
year exceeding the contribution limit speci-
fied in subsection (c)(1). 
‘‘(C) No distribution (other than a dis-
tribution of a qualified rollover contribution) 
will be allowed— 
‘‘(i) before the date on which the ac-
count beneficiary attains age 18, or 
‘‘(ii) in the case of such an account 
the account beneficiary of which has not 
attained age 25, if the aggregate distribu-
tions from such account exceeds the 
amount that is 1⁄2 the cash equivalent 
value of the account on the date on which 
the account beneficiary attains age 18. 
‘‘(D) The account beneficiary has not at-
tained age 8 on the date of the establishment 
of the account. 
‘‘(E) The trustee is a bank (as defined in 
section 408(n)) or another person who dem-
onstrates to the satisfaction of the Secretary 
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that the manner in which that person will ad-
minister the trust will be consistent with the re-
quirements of this section or who has so dem-
onstrated with respect to any individual retire-
ment plan. 
‘‘(F) The interest of an individual in the 
balance of his account is nonforfeitable. 
‘‘(G) The assets of the trust shall not be 
commingled with other property except in a 
common trust fund or common investment 
fund. 
‘‘(H) No part of the trust funds will be in-
vested in any asset other than eligible invest-
ments. 
‘‘(2) ELIGIBLE INVESTMENTS.—The term ‘eligi-
ble investments’ means stock of a regulated invest-
ment company (within the meaning of section 851) 
which— 
‘‘(A) tracks a well-established index of 
United States equities (or which invests in an 
equivalent diversified portfolio of United States 
equities), 
‘‘(B) does not use leverage, 
‘‘(C) minimizes fees and expenses, and 
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‘‘(D) meets such other criteria as the Sec-
retary determines appropriate for purposes of 
this section. 
‘‘(3) ACCOUNT
BENEFICIARY.—The term ‘ac-
count beneficiary’ means the individual on whose be-
half the Trump account was established. 
‘‘(c) TREATMENT OF CONTRIBUTIONS.— 
‘‘(1) CONTRIBUTION LIMIT.—The contribution 
limit for any taxable year is $5,000. 
‘‘(2) CONTRIBUTIONS
FROM
TAX
EXEMPT 
SOURCES
AND
ROLLOVER
CONTRIBUTIONS.—The 
amount contributed to a Trump account for pur-
poses of paragraph (1) shall be determined without 
regard to— 
‘‘(A) a qualified rollover contribution, 
‘‘(B) any contribution from the Federal 
Government or any State, local, or tribal gov-
ernment, or 
‘‘(C) any contribution made through the 
program established under subsection (l). 
‘‘(3) COST-OF-LIVING ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning in a calendar year after 
2026, the $5,000 amount under paragraph (1) 
shall be increased by an amount equal to— 
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‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year, determined by substituting 
‘calendar year 2025’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘(B) ROUNDING.—If any increase under 
subparagraph (A) is not a multiple of $100, 
such amount shall be rounded to the next lower 
multiple of $100. 
‘‘(d) DISTRIBUTIONS.— 
‘‘(1) AMOUNTS ALLOCABLE TO INVESTMENT IN 
THE CONTRACT.—A distribution from a Trump ac-
count of an amount allocable to the investment in 
the contract shall not be includible in the gross in-
come of the distributee. 
‘‘(2) AMOUNTS ALLOCABLE TO INCOME ON THE 
CONTRACT
USED
FOR
QUALIFIED
EXPENSES.—A 
distribution from a Trump account of an amount al-
locable to income on the contract and which is used 
exclusively to pay for qualified expenses shall be in-
cludible in net capital gain of the distributee under 
section 1(h)(12). 
‘‘(3) AMOUNTS
INCLUDIBLE
IN
GROSS
IN-
COME.—Any distribution from a Trump account 
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which is not described in paragraph (1) or (2) shall 
be includible in the gross income of the distributee. 
‘‘(4) QUALIFIED EXPENSES.—For purposes of 
this subsection, the term ‘qualified expenses’ means 
any of the following expenses paid or incurred for 
the benefit of the account beneficiary: 
‘‘(A) Qualified higher education expenses 
(as defined in section 529(e)(3)) determined 
without regard to section 529(c)(7). 
‘‘(B) Qualified post-secondary credentialing 
expenses (as defined in section 529(f)). 
‘‘(C) Under regulations provided by the 
Secretary, amounts paid or incurred with re-
spect to any small businesses for which the ben-
eficiary has obtained any small business loan, 
small farm loan, or similar loan. 
‘‘(D) Any amount used for the purchase 
(as defined in section 36(c)(3)) of the principal 
residence (as used in section 121) of the ac-
count beneficiary if such account beneficiary is 
a first-time homebuyer (as defined in section 
36(c)(1)) with respect to such purchase. 
‘‘(5) EXCEPTIONS.—Paragraphs (2) and (3) 
shall not apply to any distribution which is a quali-
fied rollover contribution. 
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‘‘(6) ADDITIONAL TAX ON CERTAIN DISTRIBU-
TIONS.—In the case of a distributee who has not at-
tained age 30, the tax imposed by this chapter on 
the account beneficiary for any taxable year in which 
there is a distribution from a Trump account of 
such beneficiary which is includible in gross income 
under paragraph (3) shall be increased by 10 per-
cent of the amount which is so includible. 
‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For 
purposes of this section, the term ‘qualified rollover con-
tribution’ means an amount which is paid in a direct trust-
ee-to-trustee transfer from a Trump account maintained 
for the benefit of the account beneficiary to a Trump ac-
count maintained for such beneficiary. 
‘‘(f) TREATMENT AFTER DEATH OF ACCOUNT BENE-
FICIARY.—Rules similar to the rules of section 223(f)(8) 
shall apply for purposes of this section. 
‘‘(g) DETERMINATIONS OF AGGREGATE DISTRIBU-
TIONS AND INVESTMENT IN CONTRACT IN THE CASE OF 
CERTAIN ROLLOVER CONTRIBUTIONS.—In the case of a 
qualified rollover contribution which is described in sub-
section (e)(2), any determination required under this sec-
tion of the amount of the investment of the contract or 
of aggregate distributions from the Trump account shall 
be determined with respect to the aggregate of such 
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amounts for all Trump accounts of the same account bene-
ficiary. 
‘‘(h) CUSTODIAL ACCOUNTS.—For purposes of this 
section, a custodial account shall be treated as a trust 
under this section if— 
‘‘(1) the custodial account would, except for the 
fact that it is not a trust, constitute a trust which 
meets the requirements of subsection (b)(1), and 
‘‘(2) the assets of such account are held by a 
bank (as defined in section 408(n)) or another per-
son who demonstrates, to the satisfaction of the Sec-
retary, that the manner in which he will administer 
the account will be consistent with the requirements 
of this section. 
For purposes of this title, in the case of a custodial ac-
count treated as a trust by reason of the preceding sen-
tence, the person holding the assets of such account shall 
be treated as the trustee thereof. 
‘‘(i) TERMINATION.— 
‘‘(1) AGE 31.—Upon the date on which the ac-
count beneficiary attains age 31, a Trump account 
shall cease to be a Trump account and the amount 
in such account shall be treated as distributed for 
purposes of subsection (d). 
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‘‘(2) MULTIPLE
ACCOUNTS
OF
ONE
BENE-
FICIARY.— 
‘‘(A) IN GENERAL.—In the case of any du-
plicate Trump account of any account bene-
ficiary other than a Trump account which is es-
tablished by the deposit through a qualified roll-
over contribution of the entire amount of an-
other Trump account of the account bene-
ficiary— 
‘‘(i) such duplicate Trump account 
shall cease to be a Trump account and the 
amount in such account shall be treated as 
distributed for purposes of subsection (d), 
and 
‘‘(ii) there is imposed an excise tax on 
the account beneficiary in an amount equal 
to so much of cash value of the account as 
is allocable to income on the contract. 
‘‘(B) WITHHOLDING
REQUIREMENT.—In 
the case of an account terminated under sub-
paragraph (A), the trustee shall deduct and 
withhold upon the amount to be distributed the 
amount in excess described in subparagraph 
(A)(ii). 
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‘‘(C) NOTIFICATION.—The Secretary, upon 
determining that a duplicate account exists, 
shall provide a notice to the account beneficiary 
of such duplicate account (and the account cus-
todian, in the case of a custodial account) and 
to each trustee of any Trump account of the ac-
count beneficiary of such duplicate account 
which identifies each Trump account of such 
beneficiary and the trustee of each such ac-
count. 
‘‘(D) DUPLICATE ACCOUNT.—For purposes 
of this paragraph, the term ‘duplicate account’ 
means— 
‘‘(i) in the case of an account bene-
ficiary for the benefit of whom an account 
was established by the Secretary under 
section 6434, any other Trump account of 
such account beneficiary, or 
‘‘(ii) in the case of any other account 
beneficiary, any Trump account established 
after the first Trump account established 
for the benefit of such account beneficiary. 
‘‘(j) INVESTMENT IN THE CONTRACT.—For purposes 
of this section, rules similar to the rules applied to a quali-
fied tuition program (as defined in section 529(b)) under 
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section 72(e)(9) shall apply for purposes of determining 
the investment in the contract, except that such amount 
shall be determined without regard to any contribution 
which is described in subsection (c)(2). 
‘‘(k) REPORTS.—The trustee of a Trump account 
shall make such reports regarding such account to the 
Secretary and to the beneficiary of the account with re-
spect to contributions, distributions, the amount of invest-
ment in the contract, and such other matters as the Sec-
retary may require. The reports required by this sub-
section shall be filed at such time and in such manner 
and furnished to such individuals at such time and in such 
manner as may be required. 
‘‘(l) CONTRIBUTIONS
TO PREDOMINATELY UNRE-
LATED CHILDREN.—The Secretary shall establish a pro-
gram through which contributions may be made to the 
Trump accounts of a large group of account beneficiaries 
if— 
‘‘(1) the contribution is made by any person de-
scribed in any paragraph of section 501(c) and ex-
empt from taxation under section 501(a), 
‘‘(2) such accounts are selected on the basis of 
the location of the residence of the account bene-
ficiaries, the school district in which such bene-
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ficiaries attend school, or another basis the Sec-
retary determines appropriate, and 
‘‘(3) all individuals who are account bene-
ficiaries of such an account who meet the selected 
criteria receive an equal portion of the contribu-
tion.’’. 
(b) DISTRIBUTION TAXED AT SAME RATE AS NET 
CAPITAL GAINS.—Section 1(h) is amended by adding at 
the end the following new paragraph: 
‘‘(12) DISTRIBUTIONS FROM TRUMP ACCOUNT 
TAXED AS NET CAPITAL GAIN.—For purposes of this 
subsection, the term ‘net capital gain’ means the net 
capital gain (determined without regard to this para-
graph) increased by the amount includible in net 
capital gain under this paragraph by reason of sec-
tion 530A(d)(2).’’. 
(c) TAX ON EXCESS CONTRIBUTIONS.— 
(1) IN GENERAL.—Section 4973(a) is amended 
by striking ‘‘or’’ at the end of paragraph (5), by in-
serting ‘‘or’’ at the end of paragraph (6), and by in-
serting after paragraph (6) the following new para-
graph: 
‘‘(7) a Trump account (as defined in section 
530A(b)),’’. 
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(2) EXCESS CONTRIBUTION.—Section 4973 is 
amended by adding at the end the following new 
subsection: 
‘‘(i) EXCESS CONTRIBUTIONS
TO
A TRUMP AC-
COUNT.—For purposes of this section, in the case of 
Trump accounts (within the meaning of section 530A), the 
term ‘excess contributions’ means the sum of— 
‘‘(1) the amount by which the amount contrib-
uted for the calendar year to such account (other 
than qualified rollover contributions (as defined in 
section 530A(e))) exceeds the contribution limit 
under section 530A(c)(1) (determined without re-
gard 
to 
contributions 
described 
in 
section 
530A(c)(2)), and 
‘‘(2) the amount determined under this sub-
section for the preceding calendar year, reduced by 
the excess (if any) of the maximum amount allow-
able as a contribution under section 530A(c)(1) (as 
so determined) for the calendar year over the 
amount contributed to the account for the calendar 
year (other than qualified rollover contributions (as 
so defined)).’’. 
(d) DISCLOSURE OF RETURN INFORMATION TO FA-
CILITATE CERTAIN CONTRIBUTIONS.—Section 6103(l) is 
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amended by adding at the end the following new para-
graph: 
‘‘(23) DISCLOSURE OF RETURN INFORMATION 
TO ENABLE CERTAIN CONTRIBUTIONS TO TRUMP AC-
COUNTS.—Upon written request signed by the head 
of the bureau or office of the Department of the 
Treasury requesting the inspection or disclosure, the 
Secretary may disclose the following return informa-
tion with respect to a Trump account (as defined in 
section 503A(b)) to officers and employees of such 
bureau or office to the extent that such disclosure is 
necessary to carry out section 530A(l): 
‘‘(A) Information necessary to identify the 
account holders in a particular class of bene-
ficiaries identified by a donor as the intended 
recipients. 
‘‘(B) The name, address, and social secu-
rity number of a beneficiary. 
‘‘(C) The account custodian and the ad-
dress of such custodian. 
‘‘(D) The account number. 
‘‘(E) The routing number. 
‘‘(F) To the extent determined by the Sec-
retary in regulations, such other return infor-
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mation as the Secretary determines necessary 
to ensure proper routing of funds 
Return information disclosed under this paragraph 
may only be used to identify account holders in a 
particular class of beneficiaries or for the proper 
routing of funds and may not be redisclosed by the 
Secretary.’’. 
(e) FAILURE TO PROVIDE REPORTS ON TRUMP AC-
COUNTS.—Section 6693(a)(2) is amended by striking 
‘‘and’’ at the end of subparagraph (E), by striking the 
period at the end of subparagraph (F) and inserting ‘‘, 
and’’, and by adding at the end the following new subpara-
graph: 
‘‘(G) section 530A(h) (relating to Trump 
accounts).’’. 
(f) CONFORMING AMENDMENT.—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’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
SEC. 110116. TRUMP ACCOUNTS CONTRIBUTION PILOT PRO-
GRAM. 
(a) IN GENERAL.—Subchapter B of chapter 65 is 
amended by adding at the end the following new section: 
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‘‘SEC. 6434. TRUMP ACCOUNTS CONTRIBUTION PILOT PRO-
GRAM. 
‘‘(a) IN GENERAL.—In the case of any taxpayer with 
respect to whom an eligible individual is a qualifying child, 
there shall be allowed a one-time credit of $1,000 with 
respect to each such eligible individual who is a qualifying 
child of such taxpayer which shall be payable by the Sec-
retary only to the Trump account with respect to which 
such eligible individual is the account beneficiary. 
‘‘(b) ACCOUNT ESTABLISHED BY SECRETARY.— 
‘‘(1) IN GENERAL.—In the case of any eligible 
individual that the Secretary determines is not the 
account beneficiary of any Trump account as of the 
qualifying date of such eligible individual, the Sec-
retary shall establish an account for the benefit of 
such eligible individual. 
‘‘(2) QUALIFYING
DATE.—For purposes of 
paragraph (1), the term ‘qualifying date’ means, 
with respect to an eligible individual, the first date 
on which a return of tax is filed by an individual 
with respect to whom such eligible individual is a 
qualifying child with respect to the taxable year to 
which such return relates. 
‘‘(3) NOTIFICATION.—In the case of any eligible 
individual for the benefit of whom the Secretary es-
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tablishes an account under paragraph (1), the Sec-
retary shall— 
‘‘(A) notify any individual with respect to 
whom such eligible individual is a qualifying 
child for the taxable year described in para-
graph (2) of the establishment of such account, 
and 
‘‘(B) shall provide an opportunity to such 
individual to elect to decline the application of 
this subsection to such qualifying child. 
‘‘(4) DETERMINATION
OF
DEFAULT
TRUST-
EE.—For purposes of selecting a trustee for an ac-
count established under paragraph (1), the Sec-
retary shall take into account— 
‘‘(A) the history of reliability and regu-
latory compliance of such trustee, 
‘‘(B) the customer service experience of 
such trustee, 
‘‘(C) the costs imposed by such trustee on 
the account or account beneficiary, and 
‘‘(D) to the extent practicable, the pref-
erences of any individual described in para-
graph (3)(A) with respect to such eligible indi-
vidual. 
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‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of sub-
section (a), the term eligible individual means an indi-
vidual— 
‘‘(1) who is born after December 31, 2024, and 
before January 1, 2029, and 
‘‘(2) who is a United States citizen at birth. 
‘‘(d) SOCIAL SECURITY NUMBER REQUIRED.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under subsection (a) to a taxpayer unless such tax-
payer includes on the return of tax for the taxable 
year— 
‘‘(A) such individual’s social security num-
ber, 
‘‘(B) if such individual is married, the so-
cial security number of such individual’s spouse, 
and 
‘‘(C) the social security number of the eli-
gible individual with respect to whom such cred-
it is allowed. 
‘‘(2) SOCIAL
SECURITY
NUMBER
DEFINED.— 
For purposes of paragraph (1), the term ‘social se-
curity number’ shall have the meaning given such 
term in section 24(h)(7). 
‘‘(e) DEFINITIONS.—For purposes of this section— 
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‘‘(1) QUALIFYING CHILD.—The term qualifying 
child has the meaning given such term in section 
152(c). 
‘‘(2) 
TRUMP
ACCOUNT; 
ACCOUNT
BENE-
FICIARY.—The terms ‘Trump account’ and ‘account 
beneficiary’ have the meaning given such terms in 
section 530A(b).’’. 
(b) PENALTY FOR NEGLIGENT CLAIM OR FRAUDU-
LENT CLAIM.—Part I of subchapter A of chapter 68 of 
subtitle F is amended by adding at the end the following 
new section: 
‘‘SEC. 6659. IMPROPER CLAIM FOR TRUMP ACCOUNT CON-
TRIBUTION PILOT PROGRAM CREDIT. 
‘‘(a) IN GENERAL.—In the case of any taxpayer that 
makes an excessive claim for a credit under section 
6434— 
‘‘(1) if such excess is a result of negligence or 
disregard of the rules or regulations, there shall be 
imposed a penalty of $500, or 
‘‘(2) if such excess is a result of fraud, there 
shall be imposed a penalty of $1,000. 
‘‘(b) DEFINITIONS.—The terms ‘negligence’ and ‘dis-
regard’ have the same meaning as when such terms are 
used in section 6662.’’. 
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(c) OMISSION OF CORRECT SOCIAL SECURITY NUM-
BER TREATED MATHEMATICAL OR CLERICAL ERROR.— 
Section 6213(g)(2), as amended by the preceding provi-
sions 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 sub-
paragraph: 
‘‘(AA) an omission of a correct social secu-
rity number required under section 6434(d)(1) 
(relating to the Trump accounts contribution 
pilot program).’’. 
(d) CLERICAL AMENDMENTS.— 
(1) The table of sections for subchapter B of 
chapter 65 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 6434. Trump accounts contribution pilot program.’’. 
(2) The table of sections for part I of sub-
chapter A of chapter 68 of subtitle F is amended by 
inserting after the item relating to section 6658 the 
following new item: 
‘‘Sec. 6659. Improper claim for Trump account contribution pilot program 
credit.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
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PART 3—INVESTING IN HEALTH OF AMERICAN 
FAMILIES AND WORKERS 
SEC. 110201. TREATMENT OF HEALTH REIMBURSEMENT AR-
RANGEMENTS 
INTEGRATED 
WITH 
INDI-
VIDUAL MARKET COVERAGE. 
(a) IN GENERAL.—Section 9815(b) is amended— 
(1) by striking ‘‘EXCEPTION.—Notwithstanding 
subsection (a)’’ and inserting the following: ‘‘EXCEP-
TIONS.— 
‘‘(1) SELF-INSURED GROUP HEALTH PLANS.— 
Notwithstanding subsection (a)’’, and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) CUSTOM HEALTH OPTION AND INDIVIDUAL 
CARE EXPENSE ARRANGEMENTS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subchapter, a custom health option and indi-
vidual care expense arrangement shall be treat-
ed as meeting the requirements of section 9802 
and sections 2705, 2711, 2713, and 2715 of 
title XXVII of the Public Health Service Act. 
‘‘(B) CUSTOM HEALTH OPTION AND INDI-
VIDUAL
CARE
EXPENSE
ARRANGEMENTS
DE-
FINED.—For purposes of this section, the term 
‘custom health option and individual care ex-
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pense arrangement’ means a health reimburse-
ment arrangement— 
‘‘(i) which is an employer-provided 
group health plan funded solely by em-
ployer contributions to provide payments 
or reimbursements for medical care subject 
to a maximum fixed dollar amount for a 
period, 
‘‘(ii) under which such payments or 
reimbursements may only be made for 
medical care provided during periods dur-
ing which the individual is covered— 
‘‘(I) under individual health in-
surance coverage (other than coverage 
that consists solely of excepted bene-
fits), or 
‘‘(II) under part A and B of title 
XVIII of the Social Security Act or 
part C of such title, 
‘‘(iii) which meets the nondiscrimina-
tion requirements of subparagraph (C), 
‘‘(iv) which meets the substantiation 
requirements of subparagraph (D), and 
‘‘(v) which meets the notice require-
ments of subparagraph (E). 
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‘‘(C) NONDISCRIMINATION.— 
‘‘(i) IN
GENERAL.—An arrangement 
meets the requirements of this subpara-
graph if an employer offering such ar-
rangement to an employee within a speci-
fied class of employee— 
‘‘(I) offers such arrangement to 
all employees within such specified 
class on the same terms, and 
‘‘(II) does not offer any other 
group health plan (other than an ac-
count-based group health plan or a 
group health plan that consists solely 
of excepted benefits) to any employees 
within such specified class. 
In the case of an employer who offers a 
group health plan provided through health 
insurance coverage in the small group mar-
ket (that is subject to section 2701 of the 
Public Health Service Act) to all employees 
within such specified class, subclause (II) 
shall not apply to such group health plan. 
‘‘(ii) 
SPECIFIED
CLASS
OF
EM-
PLOYEE.—For purposes of this subpara-
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graph, any of the following may be des-
ignated as a specified class of employee: 
‘‘(I) Full-time employees. 
‘‘(II) Part-time employees. 
‘‘(III) Salaried employees. 
‘‘(IV) Non-salaried employees. 
‘‘(V) Employees whose primary 
site of employment is in the same rat-
ing area. 
‘‘(VI) Employees who are in-
cluded in a unit of employees covered 
under a collective bargaining agree-
ment to which the employer is subject 
(determined under rules similar to the 
rules of section 105(h)). 
‘‘(VII) Employees who have not 
met a group health plan, or health in-
surance issuer offering group health 
insurance coverage, waiting period re-
quirement that satisfies section 2708 
of the Public Health Service Act. 
‘‘(VIII) Seasonal employees. 
‘‘(IX) Employees who are non-
resident aliens and who receive no 
earned income (within the meaning of 
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section 911(d)(2)) from the employer 
which constitutes income from sources 
within the United States (within the 
meaning of section 861(a)(3)). 
‘‘(X) Such other classes of em-
ployees as the Secretary may des-
ignate. 
An employer may designate (in such man-
ner as is prescribed by the Secretary) two 
or more of the classes described in the pre-
ceding subclauses as the specified class of 
employees to which the arrangement is of-
fered for purposes of applying this sub-
paragraph. 
‘‘(iii) 
SPECIAL
RULE
FOR
NEW 
HIRES.—An employer may designate pro-
spectively so much of a specified class of 
employees as are hired after a date set by 
the employer. Such subclass of employees 
shall be treated as the specified class for 
purposes of applying clause (i). 
‘‘(iv) RULES FOR DETERMINING TYPE 
OF EMPLOYEE.—For purposes for clause 
(ii), any determination of full-time, part- 
time, or seasonal employment status shall 
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be made under rules similar to the rules of 
section 105(h) or 4980H, whichever the 
employer elects for the plan year. Such 
election shall apply with respect to all em-
ployees of the employer for the plan year. 
‘‘(v) 
PERMITTED
VARIATION.—For 
purposes of clause (i)(I), an arrangement 
shall not fail to be treated as provided on 
the same terms within a specified class 
merely 
because 
the 
maximum 
dollar 
amount of payments and reimbursements 
which may be made under the terms of the 
arrangement for the year with respect to 
each employee within such class— 
‘‘(I) increases as additional de-
pendents of the employee are covered 
under the arrangement, and 
‘‘(II) increases with respect to a 
participant as the age of the partici-
pant increases, but not in excess of an 
amount equal to 300 percent of the 
lowest maximum dollar amount with 
respect to such a participant deter-
mined without regard to age. 
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‘‘(D) SUBSTANTIATION REQUIREMENTS.— 
An arrangement meets the requirements of this 
subparagraph if the arrangement has reason-
able procedures to substantiate— 
‘‘(i) that the participant and any de-
pendents are, or will be, enrolled in cov-
erage described in subparagraph (B)(ii) as 
of the beginning of the plan year of the ar-
rangement (or as of the beginning of cov-
erage under the arrangement in the case of 
an employee who first becomes eligible to 
participate in the arrangement after the 
date notice is given with respect to the 
plan under subparagraph (E) (determined 
without regard to clause (iii) thereof), and 
‘‘(ii) any requests made for payment 
or reimbursement of medical care under 
the arrangement and that the participant 
and any dependents remain so enrolled. 
‘‘(E) NOTICE.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (iii), an arrangement meets 
the requirements of this subparagraph if, 
under the arrangement, each employee eli-
gible to participate is, not later than 60 
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days before the beginning of the plan year, 
given written notice of the employee’s 
rights and obligations under the arrange-
ment which— 
‘‘(I) is sufficiently accurate and 
comprehensive to apprise the employee 
of such rights and obligations, and 
‘‘(II) is written in a manner cal-
culated to be understood by the aver-
age employee eligible to participate. 
‘‘(ii) NOTICE
REQUIREMENTS.—Such 
notice shall include such information as the 
Secretary may by regulation prescribe. 
‘‘(iii) NOTICE
DEADLINE
FOR
CER-
TAIN EMPLOYEES.—In the case of an em-
ployee— 
‘‘(I) who first becomes eligible to 
participate in the arrangement after 
the date notice is given with respect 
to the plan under clause (i) (deter-
mined without regard to this clause), 
or 
‘‘(II) whose employer is first es-
tablished fewer than 120 days before 
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HR 1 PCS
the beginning of the first plan year of 
the arrangement, 
the requirements of this subparagraph 
shall be treated as met if the notice re-
quired under clause (i) is provided not 
later than the date the arrangement may 
take effect with respect to such em-
ployee.’’. 
(b) INCLUSION OF CHOICE ARRANGEMENT PER-
MITTED BENEFITS ON W–2.— 
(1) IN GENERAL.—Section 6051(a), as amend-
ed by the preceding provisions of this Act, is amend-
ed by striking ‘‘and’’ at the end of paragraph (18), 
by striking the period at the end of paragraph (19) 
and inserting ‘‘, and’’, and by inserting after para-
graph (19) the following new paragraph: 
‘‘(20) the total amount of permitted benefits for 
enrolled individuals under a custom health option 
and individual care expense arrangement (as defined 
in section 9815(b)(2)) with respect to such em-
ployee.’’. 
(c) TREATMENT OF CURRENT RULES RELATING TO 
CERTAIN ARRANGEMENTS.— 
(1) NO INFERENCE.—To the extent not incon-
sistent with the amendments made by this section— 
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(A) no inference shall be made from such 
amendments with respect to the rules pre-
scribed in the Federal Register on June 20, 
2019, (84 Fed. Reg. 28888) relating to health 
reimbursement arrangements and other ac-
count-based group health plans, and 
(B) any reference to custom health option 
and individual care expense arrangements shall 
for purposes of such rules be treated as includ-
ing a reference to individual coverage health re-
imbursement arrangements. 
(2) OTHER CONFORMING OF RULES.—The Sec-
retary of the Treasury, the Secretary of Health and 
Human Services, and the Secretary of Labor shall 
modify such rules as may be necessary to conform 
to the amendments made by this section. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2025. 
SEC. 110202. PARTICIPANTS IN CHOICE ARRANGEMENT ELI-
GIBLE FOR PURCHASE OF EXCHANGE INSUR-
ANCE UNDER CAFETERIA PLAN. 
(a) IN GENERAL.—Section 125(f)(3) is amended by 
adding at the end the following new subparagraph: 
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‘‘(C) EXCEPTION
FOR
PARTICIPANTS
IN 
CHOICE ARRANGEMENT.—Subparagraph (A) 
shall not apply in the case of an employee par-
ticipating in a custom health option and indi-
vidual care expense arrangement (within the 
meaning of section 9815(b)(2)) offered by the 
employee’s employer.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 110203. EMPLOYER CREDIT FOR CHOICE ARRANGE-
MENT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 45BB. EMPLOYER CREDIT FOR CHOICE ARRANGE-
MENT. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of an eligible employer, the CHOICE arrange-
ment credit determined under this section for any taxable 
year is an amount, with respect to each employee enrolled 
during the credit period in a CHOICE arrangement main-
tained by the employer, equal to— 
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HR 1 PCS
‘‘(1) $100 multiplied by the number of months 
for which the employee is so enrolled during the first 
year in the credit period, and 
‘‘(2) one-half of the dollar amount in effect 
under paragraph (1) for the taxable year, multiplied 
by the number of months for which the employee is 
so enrolled during the second year of the credit pe-
riod. 
‘‘(b) ARRANGEMENT MUST CONSTITUTE MINIMUM 
ESSENTIAL COVERAGE.—An employee shall not be taken 
into account under subsection (a) unless such employee’s 
eligibility for the CHOICE arrangement (determined with-
out regard to the employee being enrolled) would cause 
the employee to be treated under section 36B(c)(2) as 
being eligible for minimum essential coverage consisting 
of an eligible employer-sponsored plan (as defined in sec-
tion 5000A(f)(2)). 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) 
CHOICE 
ARRANGEMENT.—The 
term 
‘CHOICE arrangement’ means a custom health op-
tion and individual care expense arrangement (as de-
fined in section 9815(b)(2)(B)). 
‘‘(2) CREDIT PERIOD.—The credit period with 
respect to an eligible employer is the first 2 one-year 
periods beginning with the month during which the 
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employer first establishes a CHOICE arrangement 
on behalf of employees of the employer. 
‘‘(3) ELIGIBLE EMPLOYER.—The term ‘eligible 
employer’ means, with respect to any taxable year 
beginning in a calendar year, an employer who is not 
an applicable large employer for the calendar year 
under section 4980H. 
‘‘(d) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning in a calendar year after 2026, the 
dollar amount in subsection (a) 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 such taxable year begins by sub-
stituting ‘calendar year 2025’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘(2) ROUNDING.—If any amount after adjust-
ment under paragraph (1) is not a multiple of $10, 
such amount shall be rounded to the next lower mul-
tiple of $10.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) is amended by striking ‘‘plus’’ at 
the end of paragraph (40), by striking the period at the 
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end of paragraph (41) and inserting ‘‘, plus’’, and by add-
ing at the end the following new paragraph: 
‘‘(42) the CHOICE arrangement credit deter-
mined under section 45BB(a).’’. 
(c) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
IMUM TAX.—Section 38(c)(4)(B) is amended— 
(1) by redesignating clauses (x), (xi), and (xii) 
as clauses (xi), (xii), and (xiii), respectively, and 
(2) by inserting after clause (ix) the following 
new clause: 
‘‘(x) the credit determined under sec-
tion 45BB,’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new item: 
‘‘Sec. 45BB. Employer credit for CHOICE arrangement.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 110204. INDIVIDUALS ENTITLED TO PART A OF MEDI-
CARE BY REASON OF AGE ALLOWED TO CON-
TRIBUTE TO HEALTH SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Section 223(c)(1)(B) is amended 
by striking ‘‘and’’ at the end of clause (ii), by striking 
the period at the end of clause (iii) and inserting ‘‘, and’’, 
and by adding at the end the following new clause: 
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‘‘(iv) entitlement to hospital insurance 
benefits under part A of title XVIII of the 
Social Security Act by reason of section 
226(a) of such Act.’’. 
(b) TREATMENT
OF
HEALTH
INSURANCE
PUR-
CHASED FROM ACCOUNT.—Section 223(d)(2)(C)(iv) is 
amended by inserting ‘‘and who is not an eligible indi-
vidual’’ after ‘‘who has attained the age specified in sec-
tion 1811 of the Social Security Act’’. 
(c) COORDINATION WITH PENALTY ON DISTRIBU-
TIONS
NOT
USED
FOR
QUALIFIED
MEDICAL
EX-
PENSES.—Section 223(f)(4)(C) is amended by striking 
‘‘Subparagraph (A)’’ and inserting ‘‘Except in the case of 
an eligible individual, subparagraph (A)’’ 
(d) CONFORMING AMENDMENT.—Section 223(b)(7) 
is amended by inserting ‘‘(other than an entitlement to 
benefits described in subsection (c)(1)(B)(iv))’’ after ‘‘So-
cial Security Act’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to months beginning after Decem-
ber 31, 2025. 
SEC. 110205. TREATMENT OF DIRECT PRIMARY CARE SERV-
ICE ARRANGEMENTS. 
(a) IN GENERAL.—Section 223(c)(1) is amended by 
adding at the end the following new subparagraph: 
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‘‘(E) TREATMENT
OF
DIRECT
PRIMARY 
CARE SERVICE ARRANGEMENTS.— 
‘‘(i) IN GENERAL.—A direct primary 
care service arrangement shall not be 
treated as a health plan for purposes of 
subparagraph (A)(ii). 
‘‘(ii) DIRECT PRIMARY CARE SERVICE 
ARRANGEMENT.—For purposes of this sub-
paragraph— 
‘‘(I) IN GENERAL.—The term ‘di-
rect primary care service arrange-
ment’ means, with respect to any indi-
vidual, an arrangement under which 
such individual is provided medical 
care (as defined in section 213(d)) 
consisting solely of primary care serv-
ices provided by primary care practi-
tioners 
(as 
defined 
in 
section 
1833(x)(2)(A) of the Social Security 
Act, determined without regard to 
clause (ii) thereof), if the sole com-
pensation for such care is a fixed peri-
odic fee. 
‘‘(II) LIMITATION.—With respect 
to any individual for any month, such 
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term shall not include any arrange-
ment if the aggregate fees for all di-
rect primary care service arrange-
ments (determined without regard to 
this subclause) with respect to such 
individual for such month exceed 
$150 (twice such dollar amount in the 
case of an individual with any direct 
primary care service arrangement (as 
so determined) that covers more than 
one individual). 
‘‘(iii) CERTAIN
SERVICES
SPECIFI-
CALLY
EXCLUDED
FROM
TREATMENT
AS 
PRIMARY
CARE
SERVICES.—For purposes 
of this subparagraph, the term ‘primary 
care services’ shall not include— 
‘‘(I) procedures that require the 
use of general anesthesia, 
‘‘(II) prescription drugs (other 
than vaccines), and 
‘‘(III) laboratory services not 
typically administered in an ambula-
tory primary care setting. 
The Secretary, after consultation with the 
Secretary of Health and Human Services, 
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shall issue regulations or other guidance 
regarding the application of this clause.’’. 
(b) DIRECT PRIMARY CARE SERVICE ARRANGEMENT 
FEES
TREATED
AS
MEDICAL
EXPENSES.—Section 
223(d)(2)(C) is amended by striking ‘‘or’’ at the end of 
clause (iii), by striking the period at the end of clause (iv) 
and inserting ‘‘, or’’, and by adding at the end the fol-
lowing new clause: 
‘‘(v) any direct primary care service 
arrangement.’’. 
(c) INFLATION ADJUSTMENT.—Section 223(g)(1) is 
amended— 
(1) by inserting ‘‘, (c)(1)(E)(ii)(II),’’ after 
‘‘(b)(2)’’ each place it appears, and 
(2) in subparagraph (B), by striking ‘‘clause 
(ii)’’ in clause (i) and inserting ‘‘clauses (ii) and 
(iii)’’, by striking ‘‘and’’ at the end of clause (i), by 
striking the period at the end of clause (ii) and in-
serting ‘‘, and’’, and by inserting after clause (ii) the 
following new clause: 
‘‘(iii) in the case of the dollar amount 
in subsection (c)(1)(E)(ii)(II) for taxable 
years beginning in calendar years after 
2026, ‘calendar year 2025’.’’.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to months beginning after Decem-
ber 31, 2025. 
SEC. 110206. ALLOWANCE OF BRONZE AND CATASTROPHIC 
PLANS IN CONNECTION WITH HEALTH SAV-
INGS ACCOUNTS. 
(a) IN GENERAL.—Section 223(c)(2) is amended by 
adding at the end the following new subparagraph: 
‘‘(H) BRONZE AND CATASTROPHIC PLANS 
TREATED
AS
HIGH
DEDUCTIBLE
HEALTH 
PLANS.—The term ‘high deductible health plan’ 
shall include any plan— 
‘‘(i) available as individual coverage 
through an Exchange established under 
section 1311 or 1321 of the Patient Pro-
tection and Affordable Care Act, and 
‘‘(ii) described in subsection (d)(1)(A) 
or (e) of section 1302 of such Act.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to months beginning after Decem-
ber 31, 2025. 
SEC. 110207. ON-SITE EMPLOYEE CLINICS. 
(a) IN GENERAL.—Section 223(c)(1), as amended by 
the preceding provisions of this Act, is amended by adding 
at the end the following new subparagraph: 
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‘‘(F) SPECIAL RULE FOR QUALIFIED ITEMS 
AND SERVICES.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A)(ii), an individual shall 
not be treated as covered under a health 
plan described in subclauses (I) and (II) of 
such subparagraph merely because the in-
dividual is eligible to receive, or receives, 
qualified items and services— 
‘‘(I) at a healthcare facility lo-
cated at a facility owned or leased by 
the employer of the individual (or of 
the individual’s spouse), or 
‘‘(II) at a healthcare facility op-
erated primarily for the benefit of em-
ployees of the employer of the indi-
vidual (or of the individual’s spouse). 
‘‘(ii) QUALIFIED ITEMS AND SERVICES 
DEFINED.—For purposes of this subpara-
graph, the term ‘qualified items and serv-
ices’ means the following: 
‘‘(I) Physical examination. 
‘‘(II) Immunizations, including 
injections of antigens provided by em-
ployees. 
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‘‘(III) Drugs or biologicals other 
than a prescribed drug (as such term 
is defined in section 213(d)(3)). 
‘‘(IV) Treatment for injuries oc-
curring in the course of employment. 
‘‘(V) Preventive care for chronic 
conditions (as defined in clause (iv)). 
‘‘(VI) Drug testing. 
‘‘(VII) 
Hearing 
or 
vision 
screenings and related services. 
‘‘(iii) AGGREGATION.—For purposes 
of clause (i), all persons treated as a single 
employer under subsection (b), (c), (m), or 
(o) of section 414 shall be treated as a sin-
gle employer. 
‘‘(iv) PREVENTIVE CARE FOR CHRON-
IC CONDITIONS.—For purposes of this sub-
paragraph, the term ‘preventive care for 
chronic conditions’ means any item or 
service specified in the Appendix of Inter-
nal Revenue Service Notice 2019–45 which 
is prescribed to treat an individual diag-
nosed with the associated chronic condition 
specified in such Appendix for the purpose 
of preventing the exacerbation of such 
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chronic condition or the development of a 
secondary condition, including any amend-
ment, addition, removal, or other modifica-
tion made by the Secretary (pursuant to 
the authority granted to the Secretary 
under paragraph (2)(C)) to the items or 
services specified in such Appendix subse-
quent to the date of publication of such 
Notice.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to months in taxable years begin-
ning after December 31, 2025. 
SEC. 110208. CERTAIN AMOUNTS PAID FOR PHYSICAL AC-
TIVITY, FITNESS, AND EXERCISE TREATED AS 
AMOUNTS PAID FOR MEDICAL CARE. 
(a) IN GENERAL.—Section 223(d)(2)(A) is amended 
by adding at the end the following: ‘‘For purposes of this 
subparagraph, amounts paid for qualified sports and fit-
ness expenses shall be treated as paid for medical care.’’. 
(b) QUALIFIED SPORTS AND FITNESS EXPENSES.— 
Section 223(d)(2) is amended by adding at the end the 
following new subparagraph: 
‘‘(E) QUALIFIED SPORTS AND FITNESS EX-
PENSES.—For purposes of this paragraph— 
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‘‘(i) IN GENERAL.—The term ‘quali-
fied sports and fitness expenses’ means 
amounts paid exclusively for the sole pur-
pose of participating in a physical activity 
including— 
‘‘(I) for membership at a fitness 
facility, or 
‘‘(II) for participation or instruc-
tion in physical exercise or physical 
activity. 
‘‘(ii) 
OVERALL
DOLLAR
LIMITA-
TION.— 
‘‘(I) IN
GENERAL.—The aggre-
gate amount treated as qualified 
sports and fitness expenses with re-
spect to any taxpayer for any taxable 
year shall not exceed $500 ($1,000 in 
the case of a joint return or a head of 
household (as defined in section 
2(b))). 
‘‘(II) 
MONTHLY
LIMIT.—The 
amount taken into account under sub-
paragraph (A) as paid for partici-
pating in a physical activity during a 
month beginning during the taxable 
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year shall not exceed an amount equal 
to 1/12 of the amount in effect with 
respect to the taxpayer for the taxable 
year under subclause (I). 
‘‘(iii) FITNESS
FACILITY.—For pur-
poses of clause (i)(I), the term ‘fitness fa-
cility’ means a facility— 
‘‘(I) which provides instruction in 
a program of physical exercise, offers 
facilities for the preservation, mainte-
nance, encouragement, or development 
of physical fitness, or serves as the 
site of such a program of a State or 
local government, 
‘‘(II) which is not a private club 
owned and operated by its members, 
‘‘(III) which does not offer golf, 
hunting, sailing, or riding facilities, 
‘‘(IV) the health or fitness com-
ponent of which is not incidental to its 
overall function and purpose, and 
‘‘(V) which is fully compliant 
with the State of jurisdiction and 
Federal anti-discrimination laws. 
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‘‘(iv) 
TREATMENT
OF
PERSONAL 
TRAINERS, EXERCISE
VIDEOS, ETC.—The 
term ‘qualified sports and fitness expenses’ 
shall not include any amount paid for— 
‘‘(I) videos, books, or similar ma-
terials, 
‘‘(II) remote or virtual instruc-
tion in a physical exercise or physical 
activity, unless such instruction is live, 
or 
‘‘(III) one-on-one personal train-
ing. 
‘‘(v) 
PROGRAMS
WHICH
INCLUDE 
COMPONENTS OTHER THAN PHYSICAL EX-
ERCISE
AND
PHYSICAL
ACTIVITY.—Rules 
similar to the rules of section 213(d)(6) 
shall apply in the case of any program that 
includes physical exercise or physical activ-
ity and also other components. For pur-
poses of the preceding sentence, travel and 
accommodations shall be treated as a sepa-
rate component. 
‘‘(vi) MEMBERSHIP, PARTICIPATION, 
AND
INSTRUCTION
MUST
BE
CON-
TINUING.—An amount shall not be treated 
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as paid for the purpose of participating in 
a physical activity unless— 
‘‘(I) in the case of a membership 
at a fitness facility, such membership 
is for more than 1 day, and 
‘‘(II) in the case of participation 
or instruction in physical exercise or 
physical activity, the amount paid 
constitutes payment for more than 1 
occasion of such participation or in-
struction. 
‘‘(vii) 
COST-OF-LIVING
ADJUST-
MENT.—In the case of any taxable year be-
ginning in a calendar year after 2026, each 
dollar amount in clause (ii)(I) shall be in-
creased by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for the calendar year in which such 
taxable year begins by substituting 
‘calendar year 2025’ for ‘calendar 
year 2016’ in subparagraph (A)(ii) 
thereof. 
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If any increase under the preceding sen-
tence is not a multiple of $50, such in-
crease shall be rounded to the nearest mul-
tiple of $50.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 110209. ALLOW BOTH SPOUSES TO MAKE CATCH-UP 
CONTRIBUTIONS TO THE SAME HEALTH SAV-
INGS ACCOUNT. 
(a) IN GENERAL.—Section 223(b)(5) is amended to 
read as follows: 
‘‘(5) SPECIAL RULE FOR MARRIED INDIVIDUALS 
WITH FAMILY COVERAGE.— 
‘‘(A) IN GENERAL.—In the case of individ-
uals who are married to each other, if both 
spouses are eligible individuals and either 
spouse has family coverage under a high de-
ductible health plan as of the first day of any 
month— 
‘‘(i) the limitation under paragraph 
(1) shall be applied by not taking into ac-
count any other high deductible health 
plan coverage of either spouse (and if such 
spouses both have family coverage under 
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separate high deductible health plans, only 
one such coverage shall be taken into ac-
count), 
‘‘(ii) such limitation (after application 
of clause (i)) shall be reduced by the ag-
gregate amount paid to Archer MSAs of 
such spouses for the taxable year, and 
‘‘(iii) such limitation (after application 
of clauses (i) and (ii)) shall be divided 
equally between such spouses unless they 
agree on a different division. 
‘‘(B) TREATMENT
OF
ADDITIONAL
CON-
TRIBUTION AMOUNTS.—If both spouses referred 
to in subparagraph (A) have attained age 55 
before the close of the taxable year, the limita-
tion referred to in subparagraph (A)(iii) which 
is subject to division between the spouses shall 
include the additional contribution amounts de-
termined under paragraph (3) for both spouses. 
In any other case, any additional contribution 
amount determined under paragraph (3) shall 
not be taken into account under subparagraph 
(A)(iii) and shall not be subject to division be-
tween the spouses.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 110210. FSA AND HRA TERMINATIONS OR CONVER-
SIONS TO FUND HSAs. 
(a) IN GENERAL.—Section 106(e)(2) is amended to 
read as follows: 
‘‘(2) QUALIFIED
HSA 
DISTRIBUTION.—For 
purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
HSA distribution’ means, with respect to any 
employee, a distribution from a health flexible 
spending arrangement or health reimbursement 
arrangement of such employee contributed di-
rectly to a health savings account of such em-
ployee if— 
‘‘(i) such distribution is made in con-
nection with such employee establishing 
coverage under a high deductible health 
plan (as defined in section 223(c)(2)) if 
during the 4-year period preceding the 
date the employee so establishes coverage 
the employee was not covered under such 
a high deductible health plan, and 
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‘‘(ii) such arrangement is described in 
section 223(c)(1)(B)(v) with respect to any 
portion of the plan year remaining after 
such distribution is made, if such employee 
remains enrolled in such arrangement. 
‘‘(B) DOLLAR
LIMITATION.—The aggre-
gate amount of distributions from health flexi-
ble spending arrangements and health reim-
bursement arrangements of any employee which 
may be treated as qualified HSA distributions 
in connection with an establishment of coverage 
described in subparagraph (A)(i) shall not ex-
ceed the dollar amount in effect under section 
125(i)(1) (twice such amount in the case of cov-
erage 
which 
is 
described 
in 
section 
223(b)(2)(B)).’’. 
(b) PARTIAL REDUCTION OF LIMITATION ON DE-
DUCTIBLE HSA CONTRIBUTIONS.—Section 223(b)(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 inserting after subpara-
graph (C) the following new subparagraph: 
‘‘(D) so much of any qualified HSA dis-
tribution (as defined in section 106(e)(2)) made 
to a health savings account of such individual 
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during the taxable year as does not exceed the 
aggregate increases in the balance of the ar-
rangement from which such distribution is 
made which occur during the portion of the 
plan year which precedes such distribution 
(other than any balance carried over to such 
plan year and determined without regard to any 
decrease in such balance during such portion of 
the plan year).’’. 
(c) CONVERSION
TO HSA-COMPATIBLE ARRANGE-
MENT
FOR
REMAINDER
OF
PLAN
YEAR.—Section 
223(c)(1)(B), as amended by this preceding provisions of 
this Act, is amended by striking ‘‘and’’ at the end of clause 
(iii), by striking the period at the end of clause (iv) and 
inserting ‘‘, and’’, and by adding at the end the following 
new clause: 
‘‘(v) coverage under a health flexible 
spending arrangement or health reimburse-
ment arrangement for the portion of the 
plan year after a qualified HSA distribu-
tion (as defined in section 106(e)(2) deter-
mined without regard to subparagraph 
(A)(ii) thereof) is made, if the terms of 
such arrangement which apply for such 
portion of the plan year are such that, if 
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such terms applied for the entire plan 
year, then such arrangement would not be 
taken into account under subparagraph 
(A)(ii) of this paragraph for such plan 
year.’’. 
(d) INCLUSION OF QUALIFIED HSA DISTRIBUTIONS 
ON W–2.— 
(1) IN GENERAL.—Section 6051(a), as amend-
ed by the preceding provisions of this Act, is amend-
ed by striking ‘‘and’’ at the end of paragraph (19), 
by striking the period at the end of paragraph (20) 
and inserting ‘‘, and’’, and by inserting after para-
graph (20) the following new paragraph: 
‘‘(21) the amount of any qualified HSA dis-
tribution (as defined in section 106(e)(2)) with re-
spect to such employee.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
6051(a)(12) is amended by inserting ‘‘(other than 
any qualified HSA distribution, as defined in section 
106(e)(2))’’ before the comma at the end. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made after Decem-
ber 31, 2025. 
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SEC. 110211. SPECIAL RULE FOR CERTAIN MEDICAL EX-
PENSES INCURRED BEFORE ESTABLISHMENT 
OF HEALTH SAVINGS ACCOUNT. 
(a) IN GENERAL.—Section 223(d)(2), as amended by 
the preceding provisions of this Act, is amended by adding 
at the end the following new subparagraph: 
‘‘(F) TREATMENT
OF
CERTAIN
MEDICAL 
EXPENSES INCURRED BEFORE ESTABLISHMENT 
OF ACCOUNT.—If a health savings account is 
established during the 60-day period beginning 
on the date that coverage of the account bene-
ficiary under a high deductible health plan be-
gins, then, solely for purposes of determining 
whether an amount paid is used for a qualified 
medical expense, such account shall be treated 
as having been established on the date that 
such coverage begins.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to coverage beginning 
after December 31, 2025. 
SEC. 110212. CONTRIBUTIONS PERMITTED IF SPOUSE HAS 
HEALTH 
FLEXIBLE 
SPENDING 
ARRANGE-
MENT. 
(a) CONTRIBUTIONS PERMITTED IF SPOUSE HAS A 
HEALTH FLEXIBLE SPENDING ARRANGEMENT.—Section 
223(c)(1)(B), as amended by this preceding provisions of 
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this Act, is amended by striking ‘‘and’’ at the end of clause 
(iv), by striking the period at the end of clause (v) and 
inserting ‘‘, and’’, and by adding at the end the following 
new clause: 
‘‘(vi) coverage under a health flexible 
spending arrangement of the spouse of the 
individual for any plan year of such ar-
rangement if the aggregate reimburse-
ments under such arrangement for such 
year do not exceed the aggregate expenses 
which would be eligible for reimbursement 
under such arrangement if such expenses 
were determined without regard to any ex-
penses paid or incurred with respect to 
such individual.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after De-
cember 31, 2025. 
SEC. 110213. INCREASE IN HEALTH SAVINGS ACCOUNT CON-
TRIBUTION LIMITATION FOR CERTAIN INDI-
VIDUALS. 
(a) INCREASE.— 
(1) IN GENERAL.—Section 223(b) is amended 
by adding at the end the following new paragraph: 
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‘‘(9) INCREASE
IN
LIMITATION
FOR
CERTAIN 
TAXPAYERS.— 
‘‘(A) IN GENERAL.—The applicable limita-
tion under subparagraphs (A) and (B) of para-
graph (2) shall be increased by $4,300 and 
$8,550, respectively. 
‘‘(B) LIMITATION
BASED
ON
MODIFIED 
ADJUSTED GROSS INCOME.—The amount of the 
increase under subparagraph (A) (determined 
without regard to this subparagraph) shall be 
reduced (but not below zero) by the amount 
which bears the same ratio to the amount of 
such increase (as so determined) as— 
‘‘(i) the excess (if any) of— 
‘‘(I) 
the 
taxpayer’s 
adjusted 
gross income for such taxable year, 
over 
‘‘(II) $75,000 ($150,000 in the 
case of a joint return, if the eligible 
individual has family coverage), bears 
to 
‘‘(ii) $25,000 ($50,000 in the case of 
a joint return, if the eligible individual has 
family coverage). 
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For purposes of the preceding sentence, ad-
justed gross income shall be determined in the 
same manner as under section 219(g)(3)(A), 
except determined without regard to any deduc-
tion allowed under this section.’’. 
(2) ONLY TO APPLY TO EMPLOYEE CONTRIBU-
TIONS.—Section 106(d)(1) is amended by inserting 
‘‘and section 223(b)(9)’’ after ‘‘determined without 
regard to this subsection’’. 
(b) INFLATION ADJUSTMENT.—Section 223(g), as 
amended by the preceding provisions of this Act, is amend-
ed— 
(1) by inserting ‘‘, (b)(9)(A), (b)(9)(B)(i)(II),’’ 
before ‘‘and (c)(2)(A)’’ each place it appears, 
(2) by striking ‘‘clauses (ii) and (ii)’’ in para-
graph (1)(B)(i) and inserting ‘‘clauses (ii), (iii), and 
(iv)’’, 
(3) by striking ‘‘and’’ at the end of paragraph 
(1)(B)(ii), 
(4) by striking the period at the end of para-
graph (1)(B)(iii) and inserting ‘‘, and’’, and 
(5) by inserting after paragraph (1)(B)(iii) the 
following new clause: 
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‘‘(iv) in the case of the dollar amounts 
in 
subsections 
(b)(9)(A) 
and 
(b)(9)(B)(i)(II), ‘calendar year 2025’.’’. 
(c) EFFECTIVE DATE.— 
(1) SUBSECTION (a).—The amendments made 
by subsection (a) shall apply to taxable years begin-
ning after December 31, 2025. 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall apply to taxable years begin-
ning after December 31, 2026. 
SEC. 110214. REGULATIONS. 
The Secretary of the Treasury and the Secretary of 
Health and Human Services may each prescribe such rules 
and other guidance as may be necessary or appropriate 
to carry out the amendments made by this part. 
Subtitle B—Make Rural America 
and Main Street Grow Again 
PART 1—EXTENSION OF TAX CUTS AND JOBS ACT 
REFORMS FOR RURAL AMERICA AND MAIN 
STREET 
SEC. 111001. EXTENSION OF SPECIAL DEPRECIATION AL-
LOWANCE FOR CERTAIN PROPERTY. 
(a) IN GENERAL.—Section 168(k) is amended— 
(1) in paragraph (2)— 
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(A) by striking ‘‘January 1, 2027’’ each 
place it appears and inserting ‘‘January 1, 
2030’’, and 
(B) in subparagraph (B)— 
(i) in clause (i)(II), by striking ‘‘Janu-
ary 1, 2028’’ and inserting ‘‘January 1, 
2031’’, and 
(ii) in the heading of clause (ii), by 
striking ‘‘PRE-JANUARY 1, 2027 BASIS’’ and 
inserting ‘‘PRE-JANUARY 1, 2030 BASIS’’, 
(2) in paragraph (5)(A), by striking ‘‘January 
1, 2027’’ and inserting ‘‘January 1, 2030’’, and 
(3) in paragraph (6)— 
(A) in subparagraph (A)— 
(i) by inserting ‘‘in the case of prop-
erty acquired by the taxpayer before Janu-
ary 20, 2025,’’ after ‘‘Except as otherwise 
provided in this paragraph,’’, and 
(ii) by striking ‘‘and’’ at the end of 
clause (iv), by striking the period at the 
end of clause (v) and inserting ‘‘, and’’, 
and by adding at the end the following new 
clause: 
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‘‘(vi) in the case of property placed in 
service after December 31, 2026, 0 per-
cent.’’, 
(B) in subparagraph (B)— 
(i) by striking ‘‘In the case of prop-
erty described’’ and inserting ‘‘In the case 
of property acquired by the taxpayer before 
January 20, 2025 and described’’, and 
(ii) by striking ‘‘and’’ at the end of 
clause (iv), by striking the period at the 
end of clause (v) and inserting ‘‘, and’’, 
and by adding at the end the following new 
clause: 
‘‘(vi) in the case of property placed in 
service after December 31, 2027, 0 per-
cent.’’, 
(C) in subparagraph (C), by inserting 
‘‘and’’ at the end of clause (iii), by striking 
clauses (iv) and (v), and by adding at the end 
the following new clause: 
‘‘(iv) in the case of a plant which is 
planted or grafted after January 19, 2025, 
and before January 1, 2030, 100 per-
cent.’’, and 
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(D) by adding at the end the following new 
subparagraph: 
‘‘(D) RULE
FOR
PROPERTY
ACQUIRED 
AFTER JANUARY 19, 2025.— 
‘‘(i) IN
GENERAL.—In the case of 
property acquired by the taxpayer after 
January 19, 2025 and placed in service 
after such date and before January 1, 
2030 (January 1, 2031, in the case of 
property described in subparagraph (B) or 
(C) of paragraph (2)), the term ‘applicable 
percentage’ means 100 percent. 
‘‘(ii) ACQUISITION DATE DETERMINA-
TION.—For purposes of clause (i), property 
shall not be treated as acquired after the 
date on which a written binding contract is 
entered into for such acquisition.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
460(c)(6)(B) is amended by striking ‘‘which’’ and all that 
follows through the period and inserting ‘‘which has a re-
covery period of 7 years or less.’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided by para-
graph (2), the amendments made by this section 
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shall apply to property acquired after January 19, 
2025 and placed in service after such date. 
(2) SPECIFIED
PLANTS.—The amendments 
made by this section shall apply to specified plants 
planted or grafted after January 19, 2025. 
SEC. 111002. DEDUCTION OF DOMESTIC RESEARCH AND EX-
PERIMENTAL EXPENDITURES. 
(a) SUSPENSION OF AMORTIZATION FOR DOMESTIC 
RESEARCH AND EXPERIMENTAL EXPENDITURES.—Sec-
tion 174 is amended by adding at the end the following 
new subsection: 
‘‘(e) SUSPENSION OF APPLICATION TO DOMESTIC 
RESEARCH AND EXPERIMENTAL EXPENDITURES.—In the 
case of any domestic research or experimental expendi-
tures (as defined in section 174A(b)), this section shall 
not apply to such expenditures paid or incurred in taxable 
years beginning after December 31, 2024, and before Jan-
uary 1, 2030.’’. 
(b) REINSTATEMENT OF EXPENSING FOR DOMESTIC 
RESEARCH AND EXPERIMENTAL EXPENDITURES.—Part 
VI of subchapter B of chapter 1 is amended by inserting 
after section 174 the following new section: 
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HR 1 PCS
‘‘SEC. 174A. TEMPORARY RULES FOR DOMESTIC RESEARCH 
AND EXPERIMENTAL EXPENDITURES. 
‘‘(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 
business other than such expenditures which are attrib-
utable to foreign research (within the meaning of section 
41(d)(4)(F)). 
‘‘(c) AMORTIZATION
OF CERTAIN DOMESTIC RE-
SEARCH AND 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 
domestic research or experimental expenditures 
which would (but for subsection (a)) be chargeable 
to capital 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 deple-
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HR 1 PCS
tion), subsection (a) shall not apply and the tax-
payer shall— 
‘‘(A) charge such expenditures to capital 
account, 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 midpoint of 
the taxable year in which such expenditures are 
paid or incurred). 
‘‘(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 
method 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 approval of the Secretary, a change to a 
different method (or to a different period) is author-
ized with respect to part or all of such expenditures. 
The election shall not apply to any expenditure paid 
or incurred during any taxable year before the tax-
able year for which the taxpayer makes the election. 
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HR 1 PCS
‘‘(d) SPECIAL RULES.— 
‘‘(1) LAND AND OTHER PROPERTY.—This sec-
tion shall not apply to any expenditure for the acqui-
sition or improvement of land, or for the acquisition 
or improvement of property to be used in connection 
with the research or experimentation and of a char-
acter 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 purposes of this section allowances under section 
167, and allowances under section 611, shall be con-
sidered 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 expendi-
ture. 
‘‘(e) TERMINATION.— 
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‘‘(1) IN GENERAL.—This section shall not apply 
to amounts paid or incurred in taxable years begin-
ning after December 31, 2029. 
‘‘(2) CHANGE IN METHOD OF ACCOUNTING.—In 
the case of a taxpayer’s first taxable year beginning 
after December 31, 2029, paragraph (1) (and the 
corresponding application of section 174) shall be 
treated as a change in method of accounting for pur-
poses of section 481 and— 
‘‘(A) such change shall be treated as initi-
ated by the taxpayer, 
‘‘(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 ex-
perimental expenditures paid or incurred in tax-
able years beginning after December 31, 2029, 
and no adjustment under section 481(a) shall 
be made.’’. 
(c) TREATMENT OF FOREIGN RESEARCH OR EXPERI-
MENTAL EXPENDITURES UPON DISPOSITION.—Section 
174(d) is amended by inserting ‘‘or reduction to amount 
realized’’ after ‘‘no deduction’’. 
(d) COORDINATION WITH CERTAIN OTHER PROVI-
SIONS.— 
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(1) RESEARCH CREDIT.— 
(A) Section 41(d)(1)(A) is amended by in-
serting ‘‘or domestic research or experimental 
expenditures under section 174A’’ after ‘‘sec-
tion 174’’. 
(B) Section 280C(c) is amended by adding 
at the end the following new paragraph: 
‘‘(4) DOMESTIC RESEARCH OR EXPERIMENTAL 
EXPENDITURES.—The domestic research or experi-
mental expenditures otherwise taken into account 
under section 174A shall be reduced by the amount 
of the credit allowed under section 41(a).’’. 
(C) Section 280C(c) is amended— 
(i) in paragraph (1)(B)— 
(I) by striking ‘‘a deduction’’ and 
inserting ‘‘an amortization deduc-
tion’’, and 
(II) by inserting ‘‘under section 
174’’ after ‘‘basic research expenses’’, 
and 
(ii) in paragraph (2)(A)(i), by striking 
‘‘paragraph (1)’’ and inserting ‘‘para-
graphs (1) and (4)’’. 
(2) AMT ADJUSTMENT.—Section 56(b)(2) is 
amended— 
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HR 1 PCS
(A) by striking ‘‘174(a)’’ each place it ap-
pears and inserting ‘‘174A(a)’’, and 
(B) by adding at the end of subparagraph 
(A) the following new flush sentence: 
‘‘In the case of research and experimental ex-
penditures charged to capital account and am-
ortized under section 174 or 174A, such 
amounts shall be amortized for purposes of this 
subsection as provided in clause (ii).’’. 
(3) OPTIONAL
10-YEAR
WRITEOFF.—Section 
59(e)(2)(B) is amended by striking ‘‘section 174(a) 
(relating to research and experimental expendi-
tures)’’ and inserting ‘‘section 174A(a) (relating to 
temporary rules for domestic research and experi-
mental expenditures)’’. 
(4) QUALIFIED SMALL ISSUE BONDS.—Section 
144(a)(4)(C)(iv) is amended by inserting ‘‘or 
174A(a)’’ after ‘‘174(a)’’. 
(5) 
START-UP
EXPENDITURES.—Section 
195(c)(1) is amended by striking ‘‘or 174’’ in the 
last sentence and inserting ‘‘174, or 174A’’. 
(6) CAPITAL EXPENDITURES.— 
(A) Section 263(a)(1)(B) is amended by 
inserting ‘‘ or 174A’’ after ‘‘174’’. 
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HR 1 PCS
(B) Section 263A(c)(2) is amended by in-
serting ‘‘or 174A’’ after ‘‘174’’. 
(7) ACTIVE
BUSINESS
COMPUTER
SOFTWARE 
ROYALTIES.—Section 543(d)(4)(A)(i) is amended by 
inserting ‘‘174A,’’ after ‘‘174,’’. 
(8) SOURCE
RULES.—Section 864(g)(2) is 
amended in the last sentence— 
(A) by striking ‘‘treated as deferred ex-
penses under subsection (b) of section 174’’ and 
inserting ‘‘allowed as an amortization deduction 
under section 174(a) or section 174A(c),’’, and 
(B) by striking ‘‘such subsection’’ and in-
serting ‘‘such section (as the case may be)’’. 
(9) 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)’’. 
(10) 
SMALL
BUSINESS
STOCK.—Section 
1202(e)(2)(B) is amended by striking ‘‘research and 
experimental expenditures under section 174’’ and 
inserting ‘‘specified research or experimental expend-
itures under section 174 or domestic research or ex-
perimental expenditures under section 174A’’. 
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HR 1 PCS
(e) CLERICAL AMENDMENT.—The table of sections 
for part VI of subchapter B of chapter 1 is amended by 
inserting after the item relating to section 174 the fol-
lowing new item: 
‘‘Sec. 174A. Temporary rules for domestic research and experimental expendi-
tures.’’. 
(f) EFFECTIVE DATE AND SPECIAL RULE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to amounts paid or incurred 
in taxable years beginning after December 31, 2024. 
(2) TREATMENT
OF
FOREIGN
RESEARCH
OR 
EXPERIMENTAL
EXPENDITURES
UPON
DISPOSI-
TION.—The amendment made by subsection (c) shall 
apply to property disposed, retired, or abandoned 
after May 12, 2025. 
(3) COORDINATION WITH RESEARCH CREDIT.— 
The amendments made by subparagraphs (B) and 
(C) of subsection (d)(1) shall apply to taxable years 
beginning after December 31, 2024. 
(4) SPECIAL
RULE
FOR
SHORT
TAXABLE 
YEARS.—The Secretary of the Treasury may pre-
scribe such rules as are necessary 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, 
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HR 1 PCS
2024, and ends before the date of the enactment of 
this Act. 
(5) CHANGE
IN
METHOD
OF
ACCOUNTING.— 
The amendments made by this section shall be treat-
ed as a change in method of accounting for purposes 
of section 481 of the Internal Revenue Code of 1986 
and— 
(A) such change shall be treated as initi-
ated by the taxpayer, 
(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 research or experimental 
expenditures paid or incurred in taxable years 
beginning after December 31, 2024, and no ad-
justments under section 481(a) shall be made. 
(6) NO INFERENCE.—The amendments made 
by subparagraphs (B) and (C) of subsection (d)(1) 
shall not be construed to create any inference with 
respect to the proper application of section 280C(c) 
of the Internal Revenue Code of 1986 with respect 
to taxable years beginning before January 1, 2025. 
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HR 1 PCS
SEC. 111003. MODIFIED CALCULATION OF ADJUSTED TAX-
ABLE INCOME FOR PURPOSES OF BUSINESS 
INTEREST DEDUCTION. 
(a) IN GENERAL.—Section 163(j)(8)(A)(v) is amend-
ed by striking ‘‘beginning before January 1, 2022’’ and 
inserting ‘‘beginning after December 31, 2024 and before 
January 1, 2030’’. 
(b) FLOOR PLAN FINANCING APPLICABLE TO CER-
TAIN TRAILERS AND CAMPERS.—Section 163(j)(9)(C) is 
amended by adding at the end the following new flush sen-
tence: 
‘‘Such term shall also include any trailer or 
camper which is designed to provide temporary 
living quarters for recreational, camping, or 
seasonal use and is designed to be towed by, or 
affixed 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 may pre-
scribe such rules as are necessary 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, 
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HR 1 PCS
2024, and ends before the date of the enactment of 
this Act. 
SEC. 111004. EXTENSION OF DEDUCTION FOR FOREIGN-DE-
RIVED INTANGIBLE INCOME AND GLOBAL IN-
TANGIBLE LOW-TAXED INCOME. 
(a) IN GENERAL.—Section 250(a) is amended— 
(1) by striking ‘‘37.5 percent’’ in paragraph 
(1)(A) and inserting ‘‘36.5 percent’’, 
(2) by striking ‘‘50 percent’’ in paragraph 
(1)(B) and inserting ‘‘49.2 percent’’, and 
(3) by striking paragraph (3). 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 111005. EXTENSION OF BASE EROSION MINIMUM TAX 
AMOUNT. 
(a) IN GENERAL.—Section 59A(b) is amended— 
(1) by striking ‘‘10 percent’’ in paragraph (1) 
and inserting ‘‘10.1 percent’’, and 
(2) by striking paragraph (2) and by redesig-
nating paragraphs (3) and (4) as paragraphs (2) 
and (3), respectively. 
(b) CONFORMING AMENDMENTS.— 
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HR 1 PCS
(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)’’. 
(2) Section 59A(b)(2), as redesignated by sub-
section (a)(2), is amended by striking ‘‘the percent-
age 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 strik-
ing ‘‘in the case of a taxpayer described in sub-
section (b)(3)(B)’’ and inserting ‘‘in the case of a 
taxpayer described in subsection (b)(2)(B)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 111006. EXCEPTION TO DENIAL OF DEDUCTION FOR 
BUSINESS MEALS. 
(a) IN GENERAL.—Section 274(o) is amended by 
striking ‘‘No deduction’’ and inserting ‘‘Except in the case 
of an expense described in subsection (e)(8), no deduc-
tion’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid or incurred after 
December 31, 2025. 
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PART 2—ADDITIONAL TAX RELIEF FOR RURAL 
AMERICA AND MAIN STREET 
SEC. 111101. 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— 
‘‘(A) the depreciation deduction provided 
by section 167(a) for the taxable year in which 
such property is placed in service shall include 
an allowance equal to 100 percent of the ad-
justed basis of the qualified production prop-
erty, and 
‘‘(B) the adjusted basis of the qualified 
production property shall be reduced by the 
amount 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— 
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‘‘(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 Janu-
ary 1, 2029, 
‘‘(vi) with respect to which the tax-
payer has elected the application of this 
subsection, and 
‘‘(vii) which is placed in service before 
January 1, 2033. 
‘‘(B) SPECIAL RULE FOR CERTAIN PROP-
ERTY
NOT
PREVIOUSLY
USED
IN
QUALIFIED 
PRODUCTION ACTIVITIES.— 
‘‘(i) IN
GENERAL.—In the case of 
property acquired by the taxpayer during 
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HR 1 PCS
the period described in subparagraph 
(A)(v), the requirements of clauses (iv) and 
(v) of subparagraph (A) shall be treated as 
satisfied if such property was not used in 
a qualified production activity (determined 
without regard to the second sentence of 
subparagraph (D)) by any person at any 
time during the period beginning on Janu-
ary 1, 2021, and ending on May 12, 2025. 
‘‘(ii) 
WRITTEN
BINDING
CON-
TRACTS.—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 
acquired after such period, such prop-
erty shall be treated as acquired not 
earlier than such date. 
‘‘(C) 
EXCLUSION
OF
OFFICE
SPACE, 
ETC.—The term ‘qualified production property’ 
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HR 1 PCS
shall not include that portion of any nonresi-
dential real property which is used for offices, 
administrative services, lodging, parking, sales 
activities, research activities, software engineer-
ing activities, or other functions unrelated to 
manufacturing, production, or refining of tan-
gible 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 ‘produc-
tion’ shall not include activities other than agri-
cultural production and chemical production. 
‘‘(F) QUALIFIED
PRODUCT.—The term 
‘qualified product’ means any tangible personal 
property. 
‘‘(G) SYNDICATION.—For purposes of sub-
paragraph (A)(iv), rules similar to the rules of 
subsection (k)(2)(E)(iii) shall apply. 
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‘‘(3) DEDUCTION
ALLOWED
IN
COMPUTING 
MINIMUM TAX.—For purposes of determining alter-
native minimum taxable income under section 55, 
the deduction under section 167 for qualified pro-
duction property shall be determined under this sec-
tion without regard to any adjustment under section 
56. 
‘‘(4) COORDINATION
WITH
CERTAIN
OTHER 
PROVISIONS.— 
‘‘(A) OTHER SPECIAL DEPRECIATION AL-
LOWANCES.—The term ‘qualified production 
property’ shall not include any property to 
which subsection (k), (l), or (m) applies. For 
purposes of subsections (k)(7), (l)(3)(D), and 
(m)(2)(B)(iii), qualified production property to 
which this subsection applies shall be treated as 
a separate class of property. 
‘‘(B) ALTERNATIVE DEPRECIATION PROP-
ERTY.—The term ‘qualified production prop-
erty’ shall not include any property to which the 
alternative depreciation system under sub-
section (g) applies. For purposes of subsection 
(g)(7)(A), qualified production property to 
which this subsection applies shall be treated as 
separate nonresidential real property. 
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HR 1 PCS
‘‘(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 de-
scribed in paragraph (2)(A)(ii) and is used by the 
taxpayer in a productive use not described in para-
graph (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 para-
graph (2)(A)(ii), and 
‘‘(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 sub-
paragraph (A) of such section, and 
‘‘(B) the basis of the taxpayer in such 
property, and the taxpayer’s allowance for de-
preciation with respect to such property, shall 
be appropriately adjusted to take into account 
amounts recognized by reason of subparagraph 
(A). 
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‘‘(6) 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) regarding what constitutes a substan-
tial transformation of property, 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 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. 
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HR 1 PCS
SEC. 111102. RENEWAL AND ENHANCEMENT OF OPPOR-
TUNITY ZONES. 
(a) MODIFICATION
OF LOW-INCOME COMMUNITY 
DEFINITION.—Section 1400Z–1(c)(1) is amended— 
(1) by striking ‘‘COMMUNITIES.—The term’’ 
and inserting the following: ‘‘COMMUNITIES.— 
‘‘(A) IN GENERAL.—The term’’, and 
(2) by adding at the end the following: 
‘‘(B) MODIFICATIONS.—For purposes of 
subparagraph (A), section 45D(e)(1) shall be 
applied in subparagraph (B) thereof, by sub-
stituting ‘70 percent’ for ‘80 percent’ each 
place it appears. 
‘‘(C) 
CERTAIN
CENSUS
TRACTS
DIS-
ALLOWED.—The term ‘low-income community’ 
shall not include any population census tract 
if— 
‘‘(i) in the case of a tract not located 
within a metropolitan area, the median 
family income for such tract is at least 125 
percent of statewide median family income, 
or 
‘‘(ii) in the case of a tract located 
within a metropolitan area, the median 
family income for such tract is at least 125 
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HR 1 PCS
percent of the metropolitan area median 
family income.’’. 
(b) NEW ROUND OF QUALIFIED OPPORTUNITY ZONE 
DESIGNATIONS.— 
(1) IN GENERAL.—Section 1400Z–1 is amended 
by adding at the end the following new subsection: 
‘‘(g) NEW ROUND
OF QUALIFIED OPPORTUNITY 
ZONE DESIGNATIONS.— 
‘‘(1) IN GENERAL.—In addition to designations 
under subsection (b), and under rules similar to the 
rules of such subsection, the Secretary shall des-
ignate tracts nominated by the chief executive offi-
cers of States for purposes of this section. 
‘‘(2) NUMBER OF DESIGNATIONS; PROPORTION 
OF RURAL AREAS DESIGNATED.— 
‘‘(A) IN
GENERAL.—Of the low-income 
communities within a State, the Secretary may 
designate under this subsection not more than 
25 percent as qualified opportunity zones, of 
which at least the lesser of the following shall 
be qualified opportunity zones which are com-
prised entirely of a rural area: 
‘‘(i) The applicable percentage of the 
total number of qualified opportunity zone 
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designations which may be made within 
the State under this subsection. 
‘‘(ii) All low-income communities with-
in the State which are comprised entirely 
of a rural area. 
‘‘(B) 
APPLICABLE
PERCENTAGE.—For 
purposes of this paragraph, the applicable per-
centage shall be, for any calendar year during 
which a designation is made, the greater of— 
‘‘(i) 33 percent, or 
‘‘(ii) the percentage of the United 
States population living within a rural area 
for the preceding calendar year. 
‘‘(3) RURAL
AREA.—Whether a low-income 
community is comprised entirely of a rural area shall 
be determined by the Secretary in consultation with 
the Secretary of Agriculture. For purposes of this 
subsection, the term ‘rural area’ has the meaning 
given such term by section 343(a)(13)(A) of the 
Consolidated Farm and Rural Development Act. 
‘‘(4) PERIOD FOR WHICH DESIGNATION IS IN 
EFFECT.—A designation as a qualified opportunity 
zone under this subsection shall remain in effect for 
the period beginning on January 1, 2027, and end-
ing on December 31, 2033. 
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‘‘(5) CONTIGUOUS
TRACTS
NOT
ELIGIBLE.— 
Subsection (e) shall not apply to designations made 
under this subsection.’’. 
(2) ELECTION WITH RESPECT TO NEW ROUND 
OF ZONES.—Section 1400Z–2(a)(2)(B) is amended 
by striking ‘‘December 31, 2026’’ and inserting 
‘‘December 31, 2033’’. 
(3) YEAR
OF
INCLUSION.—Section 1400Z– 
2(b)(1)(B) is amended to read as follows: 
‘‘(B)(i) December 31, 2026, in the case of 
an amount invested before January 1, 2027, 
and 
‘‘(ii) December 31, 2033, in the case of an 
amount invested after December 31, 2026, and 
before January 1, 2034.’’. 
(4) WINDING
DOWN
INITIAL
ZONE
DESIGNA-
TIONS.—Section 1400Z–1(f) is amended— 
(A) by striking ‘‘and ending’’ and all that 
follows and inserting the following: ‘‘and ending 
on December 31, 2026.’’, and 
(B) by striking ‘‘A designation’’ and in-
serting ‘‘Except as provided in subsection 
(g)(4), a designation’’. 
(c) MODIFICATION OF OPPORTUNITY ZONE INVEST-
MENT INCENTIVES.— 
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(1) CONSOLIDATED BASIS INCREASES; RURAL 
ZONE BASIS INCREASE.—Section 1400Z–2(b)(2)(B) 
is amended by adding at the end the following new 
clauses: 
‘‘(v) CONSOLIDATED BASIS INCREASE 
FOR INVESTMENTS AFTER 2026.—In the 
case of investments made after December 
31, 2026— 
‘‘(I) clauses (iii) and (iv) shall 
not apply, and 
‘‘(II) for any such investment 
held by the taxpayer for at least 5 
years, the basis of such adjustment 
shall be increased by an amount equal 
to 10 percent of the amount of gain 
deferred by reason of subsection 
(a)(1)(A). 
‘‘(vi) SPECIAL RULE FOR RURAL OP-
PORTUNITY
FUNDS.—Clause (v) shall be 
applied by substituting ‘30 percent’ for ‘10 
percent’ in the case of an investment in a 
qualified rural opportunity fund. 
‘‘(vii) 
QUALIFIED
RURAL
OPPOR-
TUNITY
FUND.—For purposes of clause 
(vi), a ‘qualified rural opportunity fund’ 
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means a qualified opportunity fund that 
holds at least 90 percent of its assets in 
qualified 
opportunity 
zone 
property 
which— 
‘‘(I) is qualified opportunity zone 
business property substantially all of 
the use of which, during substantially 
all of the fund’s holding period for 
such property, was in a qualified op-
portunity zone comprised entirely of a 
rural area, or 
‘‘(II) is qualified opportunity 
zone stock, or a qualified opportunity 
zone partnership interest, in a quali-
fied opportunity zone business in 
which substantially all of the tangible 
property owned or leased is qualified 
opportunity zone business property 
described in subsection (d)(3)(A)(i) 
and substantially all the use of which 
is in a qualified opportunity zone com-
prised entirely of a rural area. 
For purposes of the preceding sentence, 
property held in the fund shall be meas-
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HR 1 PCS
ured under rules similar to the rules of 
subsection (d)(1).’’. 
(2) LIMITED
TREATMENT
OF
ORDINARY
IN-
COME.—Section 1400Z–2(a) is amended by adding 
at the end the following new paragraph: 
‘‘(3) SPECIAL RULE FOR ORDINARY INCOME.— 
In the case of any ordinary income of the taxpayer 
for the taxable year— 
‘‘(A) the taxpayer may elect the applica-
tion of paragraph (1) with respect to so much 
of ordinary income as does not exceed $10,000 
(reduced by the amount of any income with re-
spect to which an election pursuant to this 
paragraph has previously been made), and 
‘‘(B) subsection (b)(2)(B) shall not apply 
to the investment with respect to such elec-
tion.’’. 
(3) SPECIAL RULE FOR IMPROVEMENT OF EX-
ISTING STRUCTURES IN RURAL AREAS, INCLUDING 
FOR DATA CENTERS.—Section 1400Z–2(d)(2)(D)(ii) 
is amended by inserting ‘‘(50 percent of such ad-
justed basis in the case of property in a qualified op-
portunity zone comprised entirely of a rural area)’’ 
after ‘‘the adjusted basis of such property’’. 
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(d) INFORMATION REPORTING ON QUALIFIED OP-
PORTUNITY FUNDS
AND QUALIFIED RURAL OPPOR-
TUNITY FUNDS.— 
(1) FILING
REQUIREMENTS
FOR
FUNDS
AND 
INVESTORS.—Subpart A of part III of subchapter A 
of chapter 61 is amended by inserting after section 
6039J the following new sections: 
‘‘SEC. 6039K. RETURNS WITH RESPECT TO QUALIFIED OP-
PORTUNITY FUNDS AND QUALIFIED RURAL 
OPPORTUNITY FUNDS. 
‘‘(a) IN GENERAL.—Every qualified opportunity fund 
shall file an annual return (at such time and in such man-
ner as the Secretary may prescribe) containing the infor-
mation described in subsection (b). 
‘‘(b) INFORMATION FROM QUALIFIED OPPORTUNITY 
FUNDS.—The information described in this subsection 
is— 
‘‘(1) the name, address, and taxpayer identifica-
tion number of the qualified opportunity fund, 
‘‘(2) whether the qualified opportunity fund is 
organized as a corporation or a partnership, 
‘‘(3) the value of the total assets held by the 
qualified opportunity fund as of each date described 
in section 1400Z–2(d)(1), 
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‘‘(4) the value of all qualified opportunity zone 
property held by the qualified opportunity fund on 
each such date, 
‘‘(5) with respect to each investment held by 
the qualified opportunity fund in qualified oppor-
tunity zone stock or a qualified opportunity zone 
partnership interest— 
‘‘(A) the name, address, and taxpayer 
identification number of the corporation in 
which such stock is held or the partnership in 
which such interest is held, as the case may be, 
‘‘(B) each North American Industry Clas-
sification System (NAICS) code that applies to 
the trades or businesses conducted by such cor-
poration or partnership, 
‘‘(C) the population census tracts in which 
the qualified opportunity zone business property 
of such corporation or partnership is located, 
‘‘(D) the amount of the investment in such 
stock or partnership interest as of each date de-
scribed in section 1400Z–2(d)(1), 
‘‘(E) the value of tangible property held by 
such corporation or partnership on each such 
date which is owned by such corporation or 
partnership, 
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‘‘(F) the value of tangible property held by 
such corporation or partnership on each such 
date which is leased by such corporation or 
partnership, 
‘‘(G) the approximate number of residen-
tial units (if any) for any real property held by 
such corporation or partnership, and 
‘‘(H) the approximate average monthly 
number of full-time equivalent employees of 
such corporation or partnership for the year 
(within numerical ranges identified by the Sec-
retary) or such other indication of the employ-
ment impact of such corporation or partnership 
as determined appropriate by the Secretary, 
‘‘(6) with respect to the items of qualified op-
portunity zone business property held by the quali-
fied opportunity fund— 
‘‘(A) the North American Industry Classi-
fication System (NAICS) code that applies to 
the trades or businesses in which such property 
is held, 
‘‘(B) the population census tract in which 
the property is located, 
‘‘(C) whether the property is owned or 
leased, 
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‘‘(D) the aggregate value of the items of 
qualified opportunity zone property held by the 
qualified opportunity fund as of each date de-
scribed in section 1400Z–2(d)(1), and 
‘‘(E) in the case of real property, number 
of residential units (if any), 
‘‘(7) the approximate average monthly number 
of full-time equivalent employees for the year of the 
trades or businesses of the qualified opportunity 
fund in which qualified opportunity zone business 
property is held (within numerical ranges identified 
by the Secretary) or such other indication of the em-
ployment impact of such trades or businesses as de-
termined appropriate by the Secretary, 
‘‘(8) with respect to each person who disposed 
of an investment in the qualified opportunity fund 
during the year— 
‘‘(A) the name and taxpayer identification 
number of such person, 
‘‘(B) the date or dates on which the invest-
ment disposed was acquired, and 
‘‘(C) the date or dates on which any such 
investment was disposed and the amount of the 
investment disposed, and 
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‘‘(9) such other information as the Secretary 
may require. 
‘‘(c) STATEMENT REQUIRED TO BE FURNISHED TO 
INVESTORS.—Every person required to make a return 
under subsection (a) shall furnish to each person whose 
name is required to be set forth in such return by reason 
of subsection (b)(8) 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 required to be shown on 
such return by reason of subsection (b)(8) with re-
spect to the person whose name is required to be so 
set forth. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) IN GENERAL.—Any term used in this sec-
tion which is also used in subchapter Z of chapter 
1 shall have the meaning given such term under 
such subchapter. 
‘‘(2) FULL-TIME
EQUIVALENT
EMPLOYEES.— 
The term ‘full-time equivalent employees’ means, 
with respect to any month, the sum of— 
‘‘(A) the number of full-time employees (as 
defined in section 4980H(c)(4)) for the month, 
plus 
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‘‘(B) the number of employees determined 
(under rules similar to the rules of section 
4980H(c)(2)(E)) by dividing the aggregate 
number of hours of service of employees who 
are not full-time employees for the month by 
120. 
‘‘(e) APPLICATION TO QUALIFIED RURAL OPPOR-
TUNITY FUNDS.—Every qualified rural opportunity fund 
(as defined in section 1400Z–2(b)(2)(B)(vii)) shall file the 
annual return required under subsection (a), and the 
statements required under subsection (c), applied— 
‘‘(1) by substituting ‘qualified rural oppor-
tunity’ for ‘qualified opportunity’ each place it ap-
pears, 
‘‘(2) 
by 
substituting 
‘section 
1400Z– 
2(b)(2)(B)(vii)’ for ‘section 1400Z–2(d)(1)’ each 
place it appears, and 
‘‘(3) by treating any reference (after the appli-
cation of paragraph (1)) to qualified rural oppor-
tunity zone stock, a qualified rural opportunity zone 
partnership interest, a qualified rural opportunity 
zone business, or qualified opportunity zone business 
property as stock, an interest, a business, or prop-
erty, respectively, described in subclause (I) or (II), 
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as 
the 
case 
may 
be, 
of 
section 
1400Z– 
2(b)(2)(B)(vii). 
‘‘SEC. 6039L. INFORMATION REQUIRED FROM QUALIFIED 
OPPORTUNITY 
ZONE 
BUSINESSES 
AND 
QUALIFIED 
RURAL 
OPPORTUNITY 
ZONE 
BUSINESSES. 
‘‘(a) IN GENERAL.—Every applicable qualified oppor-
tunity zone business shall furnish to the qualified oppor-
tunity fund described in subsection (b) a written state-
ment in such manner and setting forth such information 
as the Secretary may by regulations prescribe for purposes 
of enabling such qualified opportunity fund to meet the 
requirements of section 6039K(b)(5). 
‘‘(b) APPLICABLE QUALIFIED OPPORTUNITY ZONE 
BUSINESS.—For purposes of subsection (a), the term ‘ap-
plicable qualified opportunity zone business’ means any 
qualified opportunity zone business— 
‘‘(1) which is a trade or business of a qualified 
opportunity fund, 
‘‘(2) in which a qualified opportunity fund holds 
qualified opportunity zone stock, or 
‘‘(3) in which a qualified opportunity fund holds 
a qualified opportunity zone partnership interest. 
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‘‘(c) OTHER TERMS.—Any term used in this section 
which is also used in subchapter Z of chapter 1 shall have 
the meaning given such term under such subchapter. 
‘‘(d) APPLICATION TO QUALIFIED RURAL OPPOR-
TUNITY BUSINESSES.—Every applicable qualified rural 
opportunity zone business (as defined in subsection (b) de-
termined after application of the substitutions described 
in this sentence) shall furnish the written statement re-
quired under subsection (a), applied— 
‘‘(1) by substituting ‘qualified rural oppor-
tunity’ for ‘qualified opportunity’ each place it ap-
pears, and 
‘‘(2) by treating any reference (after the appli-
cation of paragraph (1)) to qualified rural oppor-
tunity zone stock, a qualified rural opportunity zone 
partnership interest, or a qualified rural opportunity 
zone business as stock, an interest, or a business, re-
spectively, described in subclause (I) or (II), as the 
case may be, of section 1400Z–2(b)(2)(B)(vii).’’. 
(2) PENALTIES.— 
(A) IN GENERAL.—Part II of subchapter 
B of chapter 68 is amended by inserting after 
section 6725 the following new section: 
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‘‘SEC. 6726. FAILURE TO COMPLY WITH INFORMATION RE-
PORTING 
REQUIREMENTS 
RELATING 
TO 
QUALIFIED 
OPPORTUNITY 
FUNDS 
AND 
QUALIFIED RURAL OPPORTUNITY FUNDS. 
‘‘(a) IN GENERAL.—In the case of any person re-
quired to file a return under section 6039K fails to file 
a complete and correct return under such section in the 
time and in the manner prescribed therefor, such person 
shall pay a penalty of $500 for each day during which 
such failure continues. 
‘‘(b) LIMITATION.— 
‘‘(1) IN
GENERAL.—The maximum penalty 
under this section on failures with respect to any 1 
return shall not exceed $10,000. 
‘‘(2) 
LARGE
QUALIFIED
OPPORTUNITY 
FUNDS.—In the case of any failure described in sub-
section (a) with respect to a fund the gross assets 
of which (determined on the last day of the taxable 
year) are in excess of $10,000,000, paragraph (1) 
shall be applied by substituting ‘$50,000’ for 
‘$10,000’. 
‘‘(c) PENALTY
IN CASES
OF INTENTIONAL DIS-
REGARD.—If a failure described in subsection (a) is due 
to intentional disregard, then— 
‘‘(1) subsection (a) shall be applied by sub-
stituting ‘$2,500’ for ‘$500’, 
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‘‘(2) subsection (b)(1) shall be applied by sub-
stituting ‘$50,000’ for ‘$10,000’, and 
‘‘(3) subsection (b)(2) shall be applied by sub-
stituting ‘$250,000’ for ‘$50,000’. 
‘‘(d) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any failure 
relating to a return required to be filed in a calendar 
year beginning after 2025, each of the dollar 
amounts in subsections (a), (b), and (c) shall be in-
creased by an amount equal to such dollar amount 
multiplied by the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
determined by substituting ‘calendar year 2024’ for 
‘calendar year 2016’ in subparagraph (A)(ii) thereof. 
‘‘(2) ROUNDING.— 
‘‘(A) IN
GENERAL.—If the $500 dollar 
amount in subsection (a) and (c)(1) or the 
$2,500 amount in subsection (c)(1), after being 
increased under paragraph (1), is not a mul-
tiple of $10, such dollar amount shall be round-
ed to the next lowest multiple of $10. 
‘‘(B) 
ASSET
THRESHOLD.—If 
the 
$10,000,000 dollar amount in subsection (b)(2), 
after being increased under paragraph (1), is 
not a multiple of $10,000, such dollar amount 
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shall be rounded to the next lowest multiple of 
$10,000. 
‘‘(C) OTHER
DOLLAR
AMOUNTS.—If any 
dollar amount in subsection (b) or (c) (other 
than any amount to which subparagraph (A) or 
(B) applies), after being increased under para-
graph (1), is not a multiple of $1,000, such dol-
lar amount shall be rounded to the next lowest 
multiple of $1,000.’’. 
(B) INFORMATION REQUIRED TO BE SENT 
TO OTHER TAXPAYERS.—Section 6724(d)(2), as 
amended by the preceding provisions of this 
Act, is amended— 
(i) by striking ‘‘or’’ at the end of sub-
paragraph (LL), 
(ii) by striking the period at the end 
of the subparagraph (MM) and inserting a 
comma, and 
(iii) by inserting after subparagraph 
(MM) the following new subparagraphs: 
‘‘(NN) section 6039K(c) (relating to dis-
position of qualified opportunity fund invest-
ments), or 
‘‘(OO) section 6039L (relating to informa-
tion required from certain qualified opportunity 
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zone businesses and qualified rural opportunity 
zone businesses).’’. 
(3) ELECTRONIC FILING.—Section 6011(e) is 
amended by adding at the end the following new 
paragraph: 
‘‘(8) QUALIFIED
OPPORTUNITY
FUNDS
AND 
QUALIFIED RURAL OPPORTUNITY FUNDS.—Notwith-
standing paragraphs (1) and (2), any return filed by 
a qualified opportunity fund or qualified rural oppor-
tunity fund shall be filed on magnetic media or other 
machine-readable form.’’. 
(4) CLERICAL AMENDMENTS.— 
(A) The table of sections for subpart A of 
part III of subchapter A of chapter 61 is 
amended by inserting after the item relating to 
section 6039J the following new items: 
‘‘Sec. 6039K. Returns with respect to qualified opportunity funds and qualified 
rural opportunity funds. 
‘‘Sec. 6039L. Information required from qualified opportunity zone businesses 
and qualified rural opportunity zone businesses.’’.’’. 
(B) The table of sections for part II of 
subchapter B of chapter 68 is amended by in-
serting after the item relating to section 6725 
the following new item: 
‘‘Sec. 6726. Failure to comply with information reporting requirements relating 
to qualified opportunity funds and qualified rural opportunity 
funds.’’. 
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(5) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to taxable years begin-
ning after the date of the enactment of this Act. 
(e) SECRETARY REPORTING OF DATA ON OPPOR-
TUNITY ZONE AND RURAL OPPORTUNITY ZONE TAX IN-
CENTIVES.— 
(1) IN GENERAL.—As soon as practical after 
the date of the enactment of this Act, and annually 
thereafter, the Secretary of the Treasury, or the 
Secretary’s delegate (referred to in this section as 
the ‘‘Secretary’’) shall make publicly available a re-
port on qualified opportunity funds. 
(2) INFORMATION INCLUDED.—The report re-
quired under paragraph (1) shall include, to the ex-
tent available, the following information: 
(A) The number of qualified opportunity 
funds. 
(B) The aggregate dollar amount of assets 
held in qualified opportunity funds. 
(C) The aggregate dollar amount of invest-
ments made by qualified opportunity funds in 
qualified opportunity fund property, stated sep-
arately for each North American Industry Clas-
sification System (NAICS) code. 
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(D) The percentage of population census 
tracts designated as qualified opportunity zones 
that have received qualified opportunity fund 
investments. 
(E) For each population census tract des-
ignated as a qualified opportunity zone, the ap-
proximate average monthly number of full-time 
equivalent employees of the qualified oppor-
tunity zone businesses in such qualified oppor-
tunity zone for the preceding 12-month period 
(within numerical ranges identified by the Sec-
retary) or such other indication of the employ-
ment impact of such qualified opportunity fund 
businesses as determined appropriate by the 
Secretary. 
(F) The percentage of the total amount of 
investments made by qualified opportunity 
funds in— 
(i) qualified opportunity zone property 
which is real property; and 
(ii) other qualified opportunity zone 
property. 
(G) For each population census tract, the 
aggregate approximate number of residential 
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units resulting from investments made by quali-
fied opportunity funds in real property. 
(H) The aggregate dollar amount of in-
vestments made by qualified opportunity funds 
in each population census tract. 
(3) ADDITIONAL INFORMATION.— 
(A) IN GENERAL.—Beginning with the re-
port submitted under paragraph (1) for the 6th 
year after the date of the enactment of this Act, 
the Secretary shall include in such report the 
impacts and outcomes of a designation of a 
population census tract as a qualified oppor-
tunity zone as measured by economic indicators, 
such as job creation, poverty reduction, new 
business starts, and other metrics as deter-
mined by the Secretary. 
(B) SEMI-DECENNIAL INFORMATION.— 
(i) IN GENERAL.—In the case of any 
report submitted under paragraph (1) in 
the 6th year or the 11th year after the 
date of the enactment of this Act, the Sec-
retary shall include the following informa-
tion: 
(I) For population census tracts 
designated as a qualified opportunity 
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zone, a comparison (based on aggre-
gate information) of the factors listed 
in clause (iii) between the 5-year pe-
riod ending on the date of the enact-
ment of Public Law 115–97 and the 
most recent 5-year period for which 
data is available. 
(II) For population census tracts 
designated as a qualified opportunity 
zone, a comparison (based on aggre-
gate information) of the factors listed 
in clause (iii) for the most recent 5- 
year period for which data is available 
between such population census tracts 
and a similar population census tracts 
that were not designated as a quali-
fied opportunity zone. 
(ii) CONTROL GROUPS.—For purposes 
of clause (i), the Secretary may combine 
population census tracts into such groups 
as the Secretary determines appropriate 
for purposes of making comparisons. 
(iii) FACTORS
LISTED.—The factors 
listed in this clause are the following: 
(I) The unemployment rate. 
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(II) The number of persons 
working in the population census 
tract, including the percentage of such 
persons who were not residents in the 
population census tract in the pre-
ceding year. 
(III) 
Individual, 
family, 
and 
household poverty rates. 
(IV) Median family income of 
residents of the population census 
tract. 
(V) Demographic information on 
residents of the population census 
tract, including age, income, edu-
cation, race, and employment. 
(VI) The average percentage of 
income of residents of the population 
census tract spent on rent annually. 
(VII) The number of residences 
in the population census tract. 
(VIII) The rate of home owner-
ship in the population census tract. 
(IX) The average value of resi-
dential property in the population cen-
sus tract. 
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(X) The number of affordable 
housing units in the population census 
tract. 
(XI) The number and percentage 
of residents in the population census 
tract that were not employed for the 
preceding year. 
(XII) The number of new busi-
ness starts in the population census 
tract. 
(XIII) The distribution of em-
ployees in the population census tract 
by North American Industry Classi-
fication System (NAICS) code. 
(4) PROTECTION OF IDENTIFIABLE RETURN IN-
FORMATION.—In making reports required under this 
subsection, the Secretary— 
(A) shall establish appropriate procedures 
to ensure that any amounts reported do not dis-
close taxpayer return information that can be 
associated with any particular taxpayer or com-
petitive or proprietary information, and 
(B) if necessary to protect taxpayer return 
information, may combine information required 
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with respect to individual population census 
tracts into larger geographic areas. 
(5) DEFINITIONS.—Any term used in this sub-
section which is also used in subchapter Z of chapter 
1 of the Internal Revenue Code of 1986 shall have 
the meaning given such term under such subchapter. 
(6) REPORTS
ON
QUALIFIED
RURAL
OPPOR-
TUNITY FUNDS.—The Secretary shall make publicly 
available, with respect to qualified rural opportunity 
funds, separate reports as required under this sub-
section, applied— 
(A) by substituting ‘‘qualified rural oppor-
tunity’’ for ‘‘qualified opportunity’’ each place it 
appears, 
(B) by substituting a reference to this Act 
for ‘‘Public Law 115–97’’, and 
(C) by treating any reference (after the ap-
plication of subparagraph (A)) to qualified rural 
opportunity zone stock, qualified rural oppor-
tunity zone partnership interest, qualified rural 
opportunity zone business, or qualified oppor-
tunity zone business property as stock, interest, 
business, or property, respectively, described in 
subclause (I) or (II), as the case may be, of sec-
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tion 1400Z–2(b)(2)(B)(vii) of the Internal Rev-
enue Code of 1986. 
SEC. 111103. INCREASED DOLLAR LIMITATIONS FOR EX-
PENSING OF CERTAIN DEPRECIABLE BUSI-
NESS ASSETS. 
(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 insert-
ing ‘‘determined by substituting in subparagraph 
(A)(ii) thereof— 
‘‘(I) in the case of amounts in 
paragraphs (1) and (2), ‘calendar year 
2024’ for ‘calendar year 2016’, and 
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‘‘(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. 111104. REPEAL OF REVISION TO DE MINIMIS RULES 
FOR 
THIRD 
PARTY 
NETWORK 
TRANS-
ACTIONS. 
(a) REINSTATEMENT OF EXCEPTION FOR DE MINI-
MIS PAYMENTS AS IN EFFECT PRIOR TO ENACTMENT OF 
AMERICAN RESCUE PLAN ACT OF 2021.— 
(1) IN GENERAL.—Section 6050W(e) is amend-
ed to read as follows: 
‘‘(e) EXCEPTION FOR DE MINIMIS PAYMENTS BY 
THIRD PARTY SETTLEMENT ORGANIZATIONS.—A third 
party settlement organization shall be required to report 
any information under subsection (a) with respect to third 
party network transactions of any participating payee only 
if— 
‘‘(1) the amount which would otherwise be re-
ported under subsection (a)(2) with respect to such 
transactions exceeds $20,000, and 
‘‘(2) the aggregate number of such transactions 
exceeds 200.’’. 
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(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall take effect as if included in 
section 9674 of the American Rescue Plan Act. 
(b) APPLICATION OF DE MINIMIS RULE FOR THIRD 
PARTY NETWORK TRANSACTIONS
TO BACKUP WITH-
HOLDING.— 
(1) IN GENERAL.—Section 3406(b) is amended 
by adding at the end the following new paragraph: 
‘‘(8) OTHER REPORTABLE PAYMENTS INCLUDE 
PAYMENTS IN SETTLEMENT OF THIRD PARTY NET-
WORK
TRANSACTIONS
ONLY
WHERE
AGGREGATE 
TRANSACTIONS
EXCEED
REPORTING
THRESHOLD 
FOR THE CALENDAR YEAR.— 
‘‘(A) IN GENERAL.—Any payment in set-
tlement of a third party network transaction re-
quired to be shown on a return required under 
section 6050W which is made during any cal-
endar year shall be treated as a reportable pay-
ment only if— 
‘‘(i) the aggregate number of trans-
actions with respect to the participating 
payee during such calendar year exceeds 
the number of transactions specified in 
section 6050W(e)(2), and 
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