(a) In general.—Section 179(b) is amended—

(1) in paragraph (1), by striking “$1,000,000” and inserting “$2,500,000”, and

(2) in paragraph (2), by striking “$2,500,000” and inserting “$4,000,000”.

(b) Conforming amendments.—Section 179(b)(6)(A) is amended—

(1) by inserting “(2025 in the case of the dollar amounts in paragraphs (1) and (2))” after “In the case of any taxable year beginning after 2018”, and

(2) in clause (ii), by striking “determined by substituting ‘calendar year 2017’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.” and inserting “determined by substituting in subparagraph (A)(ii) thereof—

“(I) in the case of amounts in paragraphs (1) and (2), ‘calendar year 2024’ for ‘calendar year 2016’, and

“(II) in the case of the amount in paragraph (5)(A), ‘calendar year 2017’ for ‘calendar year 2016’.”.

(c) Effective date.—The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 2024.

(a) Exception to denial of deduction for business meals.—Section 274(o), as added by section 13304 of Public Law 115–97, is amended by striking “No deduction” and inserting “Except in the case of an expense described in subsection (e)(8) or (n)(2)(C), no deduction”.

(b) Meals provided on certain fishing boats and at certain fish processing facilities not subject to 50 percent limitation.—Section 274(n)(2)(C) of the Internal Revenue Code of 1986 is amended by striking “or” at the end of clause (iii) and by adding at the end the following new clause:

“(v) provided—

“(I) on a fishing vessel, fish processing vessel, or fish tender vessel (as such terms are defined in section 2101 of title 46, United States Code), or

“(II) at a facility for the processing of fish for commercial use or consumption which—

“(aa) is located in the United States north of 50 degrees north latitude, and

“(bb) is not located in a metropolitan statistical area (within the meaning of section 143(k)(2)(B)), or”.

(c) Effective date.—The amendments made by this section shall apply to amounts paid or incurred after December 31, 2025.

(a) In general.—Section 45S is amended—

(1) in subsection (a)—

(A) by striking paragraph (1) and inserting the following:

“(1) IN GENERAL.—For purposes of section 38, in the case of an eligible employer, the paid family and medical leave credit is an amount equal to either of the following (as elected by such employer):

“(A) The applicable percentage of the amount of wages paid to qualifying employees with respect to any period in which such employees 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 during the taxable year, the applicable percentage of the total amount of premiums paid or incurred by such employer during such taxable year with respect to such insurance policy.”, and

(B) by adding at the end the following:

“(3) RATE OF PAYMENT DETERMINED WITHOUT REGARD TO WHETHER LEAVE IS TAKEN.—For purposes of determining the applicable percentage with respect to paragraph (1)(B), the rate of payment 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 allowed” 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 establishes to the satisfaction of the Secretary that such person has a substantial and legitimate business reason for failing to provide a written policy described in paragraph (1) or (2).

“(ii) SUBSTANTIAL AND LEGITIMATE BUSINESS REASON.—For purposes of clause (i), the term ‘substantial and legitimate 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 application of State or local laws relating to family and medical leave, but may include the grouping of employees of a common law employer.

“(4) TREATMENT OF BENEFITS MANDATED OR PAID FOR BY STATE OR LOCAL GOVERNMENTS.—For purposes of this section, any leave which is paid by a State or local government or required by State or local law—

“(A) except as provided in subparagraph (B), shall be taken into account in determining the amount of paid family and medical leave provided by the employer, and

“(B) shall not be taken into account in determining the amount of the paid family and medical leave credit under subsection (a).”,

(4) in subsection (d)—

(A) in paragraph (1), by inserting “(or, at the election of the employer, for not less than 6 months)” after “1 year or more”,

(B) in paragraph (2)—

(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 following: “No deduction shall be allowed for that portion of the premiums paid or incurred for the taxable year which is equal to that portion of the paid family and medical leave credit which is determined for the taxable year under section 45S(a)(1)(B).”.

(c) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

(a) In general.—Section 163(j)(8)(A)(v) is amended by striking “in the case of taxable years beginning before January 1, 2022,”.

(b) Floor plan financing applicable to certain trailers and campers.—Section 163(j)(9)(C) is amended by adding at the end the following new flush sentence:

“Such term shall also include any trailer or camper which is designed to provide temporary living quarters for recreational, camping, or 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 (or the Secretary’s delegate) may prescribe 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, 2024, and ends before the date of the enactment of this Act.

(a) In general.—Part VI of subchapter B of chapter 1 is amended by inserting after section 174 the following new section:

“SEC. 174A. Domestic research or experimental expenditures.

“(a) Treatment as expenses.—Notwithstanding section 263, there shall be allowed as a deduction any domestic research or experimental expenditures which are paid or incurred by the taxpayer during the taxable year.

“(b) Domestic research or experimental expenditures.—For purposes of this section, the term ‘domestic research or experimental expenditures’ means research or experimental expenditures paid or incurred by the taxpayer in connection with the taxpayer’s trade or business other than such expenditures which are attributable to foreign research (within the meaning of section 41(d)(4)(F)).

“(c) Amortization of certain domestic research or experimental expenditures.—

“(1) IN GENERAL.—At the election of the taxpayer, 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 depletion), subsection (a) shall not apply and the taxpayer 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 month in which the taxpayer first realizes benefits from such expenditures).

“(2) TIME FOR AND SCOPE OF ELECTION.—The election provided by paragraph (1) may be made for any taxable year, but only if made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof). The 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 authorized 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 taxable year for which the taxpayer makes the election.

“(d) Special rules.—

“(1) LAND AND OTHER PROPERTY.—This section shall not apply to any expenditure for the acquisition or improvement of land, or for the acquisition or improvement of property to be used in connection with the research or experimentation and of a character which is subject to the allowance under section 167 (relating to allowance for depreciation, etc.) or section 611 (relating to allowance for depletion); but for purposes of this section allowances under section 167, and allowances under section 611, shall be considered as expenditures.

“(2) EXPLORATION EXPENDITURES.—This section shall not apply to any expenditure paid or incurred 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 connection with the development of any software shall be treated as a research or experimental expenditure.”.

(b) Coordination with certain other provisions.—

(1) FOREIGN RESEARCH EXPENSES.—Section 174 is amended—

(A) in subsection (a)—

(i) by striking “a taxpayer’s specified research or experimental expenditures” and inserting “a taxpayer’s foreign research or experimental expenditures”, and

(ii) by striking “over the 5-year period (15-year period in the case of any specified research or experimental expenditures which are attributable to foreign research (within the meaning of section 41(d)(4)(F)))” in paragraph (2)(B) and inserting “over the 15-year period”,

(B) in subsection (b)—

(i) by striking “specified research” and inserting “foreign research”,

(ii) by inserting “and which are attributable to foreign research (within the meaning of section 41(d)(4)(F))” before the period at the end, and

(iii) by striking “specified” in the heading thereof and inserting “foreign”, and

(C) in subsection (d)—

(i) by striking “specified research or experimental expenditures” and inserting “foreign research or experimental expenditures”, and

(ii) by inserting “or reduction to amount realized” after “no deduction”.

(2) RESEARCH CREDIT.—

(A) Section 41(d)(1)(A) is amended to read as follows:

“(A) with respect to which expenditures are treated as domestic research or experimental expenditures under section 174A,”.

(B) Section 280C(c)(1) is amended to read as follows:

“(1) IN GENERAL.—The domestic research or experimental expenditures (as defined in section 174A(b)) otherwise taken into account as a deduction or charged to capital account under this chapter shall be reduced by the amount of the credit allowed under section 41(a).”.

(3) AMT ADJUSTMENT.—Section 56(b)(2) is amended—

(A) in subparagraph (A)—

(i) by striking “or 174(a)” in the matter preceding clause (i) and inserting “, 174(a), or 174A(a)”, and

(ii) by striking “research and experimental expenditures described in section 174(a)” in clause (ii) thereof and inserting “foreign research or experimental expenditures described in section 174(a) and domestic research or experimental expenditures in section 174A(a)”, and

(B) in subparagraph (C), by inserting “or 174A(a)” after “174(a)”.

(4) OPTIONAL 10-YEAR WRITEOFF.—Section 59(e)(2)(B) is amended by striking “section 174(a) (relating to research and experimental expenditures)” and inserting “section 174A(a) (relating to domestic research or experimental expenditures)”.

(5) QUALIFIED SMALL ISSUE BONDS.—Section 144(a)(4)(C)(iv) is amended by striking “174(a)” and inserting “174A(a)”.

(6) START-UP EXPENDITURES.—Section 195(c)(1) is amended by striking “or 174” in the last sentence and inserting “174, or 174A”.

(7) CAPITAL EXPENDITURES.—

(A) Section 263(a)(1)(B) is amended by inserting “or 174A” after “174”.

(B) Section 263A(c)(2) is amended by inserting “or 174A” after “174”.

(8) ACTIVE BUSINESS COMPUTER SOFTWARE ROYALTIES.—Section 543(d)(4)(A)(i) is amended by inserting “174A,” after “174,”.

(9) SOURCE RULES.—Section 864(g)(2) is amended—

(A) by striking “research and experimental expenditures within the meaning of section 174” in the first sentence and inserting “foreign research or experimental expenditures within the meaning of section 174 or domestic research or experimental expenditures within the meaning of section 174A”, and

(B) in the last sentence—

(i) by striking “treated as deferred expenses under subsection (b) of section 174” and inserting “allowed as an amortization deduction under section 174(a) or section 174A(c),”, and

(ii) by striking “such subsection” and inserting “such section (as the case may be)”.

(10) BASIS ADJUSTMENT.—Section 1016(a)(14) is amended by striking “deductions as deferred expenses under section 174(b)(1) (relating to research and experimental expenditures)” and inserting “deductions under section 174 or 174A(c)”.

(11) SMALL BUSINESS STOCK.—Section 1202(e)(2)(B) is amended by striking “which may be treated as research and experimental expenditures under section 174” and inserting “which are treated as foreign research or experimental expenditures under section 174 or domestic research or experimental expenditures under section 174A”.

(c) Change in method of accounting.—

(1) IN GENERAL.—The amendments made by subsection (a) shall be treated as a change in method of accounting for purposes of section 481 of the Internal Revenue Code of 1986 and—

(A) such change shall be treated as initiated 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 experimental expenditures (as defined in section 174A(b) of such Code (as added by this section) and determined by applying the rules of section 174A(d) of such Code) paid or incurred in taxable years beginning after December 31, 2024, and no adjustments under section 481(a) shall be made.

(2) SPECIAL RULES.—In the case of a taxable year which begins after December 31, 2024, and ends before the date of the enactment of this Act—

(A) paragraph (1)(C) shall not apply, and

(B) the change in method of accounting under paragraph (1) shall be applied on a modified cut-off basis, taking into account for purposes of section 481(a) of such Code only the domestic research or experimental expenditures (as defined in section 174A(b) of such Code (as added by this section) and determined by applying the rules of section 174A(d) of such Code) paid or incurred in such taxable year but not allowed as a deduction in such taxable year.

(d) 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 following new item:

“Sec. 174A. Domestic research or experimental expenditures.”.

(e) Effective date.—

(1) IN GENERAL.—Except as otherwise provided in this subsection or subsection (f)(1), the 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 DISPOSITION.—

(A) IN GENERAL.—The amendment by subsection (b)(1)(C)(ii) shall apply to property disposed, retired, or abandoned after May 12, 2025.

(B) NO INFERENCE.—The amendment made by subsection (b)(1)(C)(ii) shall not be construed to create any inference with respect to the proper application of section 174(d) of the Internal Revenue Code of 1986 with respect to taxable years beginning before May 13, 2025.

(3) COORDINATION WITH RESEARCH CREDIT.—The amendment made by subsection (b)(2)(B) shall apply to taxable years beginning after December 31, 2024.

(4) NO INFERENCE WITH RESPECT TO COORDINATION WITH RESEARCH CREDIT FOR PRIOR PERIODS.—The amendment made by subsection (b)(2)(B) shall not be construed to create any inference with respect to the proper application of section 280C(c) of the Internal Revenue Code of 1986 with respect to taxable years beginning before January 1, 2025.

(f) Transition rules.—

(1) ELECTION FOR RETROACTIVE APPLICATION BY CERTAIN SMALL BUSINESSES.—

(A) IN GENERAL.—At the election of an eligible taxpayer, paragraphs (1) and (3) of subsection (e) shall each be applied by substituting “December 31, 2021” for “December 31, 2024”. An election made under this subparagraph shall be made in such manner as the Secretary may provide and not later than the date that is 1 year after the date of the enactment of this Act. The taxpayer shall file an amended return for each taxable year affected by such election.

(B) ELIGIBLE TAXPAYER.—For purposes of this paragraph, the term “eligible taxpayer” means any taxpayer (other than a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3)) which meets the gross receipts test of section 448(c) for the first taxable year beginning after December 31, 2024.

(C) ELECTION TREATED AS CHANGE IN METHOD OF ACCOUNTING.—In the case of any taxpayer which elects the application of subparagraph (A)—

(i) such election may be treated as a change in method of accounting for purposes of section 481 of such Code for the taxpayer’s first taxable year affected by such election,

(ii) such change shall be treated as initiated by the taxpayer for such taxable year,

(iii) such change shall be treated as made with the consent of the Secretary, and

(iv) subsection (c) shall not apply to such taxpayer.

(D) ELECTION REGARDING COORDINATION WITH RESEARCH CREDIT.—An election under section 280C(c)(2) of the Internal Revenue Code of 1986 (or revocation of such election) for any taxable year beginning after December 31, 2021, by an eligible taxpayer making an election under subparagraph (A) shall not fail to be treated as timely made (or as made on the return) if made during the 1-year period beginning on the date of the enactment of this Act on an amended return for such taxable year.

(2) ELECTION TO DEDUCT CERTAIN UNAMORTIZED AMOUNTS PAID OR INCURRED IN TAXABLE YEARS BEGINNING BEFORE JANUARY 1, 2025.—

(A) IN GENERAL.—In the case of any domestic research or experimental expenditures (as defined in section 174A, as added by subsection (a)) which are paid or incurred in taxable years beginning after December 31, 2021, and before January 1, 2025, and which was charged to capital account, a taxpayer may elect—

(i) to deduct any remaining unamortized amount with respect to such expenditures in the first taxable year beginning after December 31, 2024, or

(ii) to deduct such remaining unamortized amount with respect to such expenditures ratably over the 2-taxable year period beginning with the first taxable year beginning after December 31, 2024.

(B) CHANGE IN METHOD OF ACCOUNTING.—In the case of a taxpayer who makes an election under this paragraph—

(i) such taxpayer shall be treated as initiating a change in method of accounting for purposes of section 481 of the Internal Revenue Code of 1986 with respect to the expenditures to which the election applies,

(ii) such change shall be treated as made with the consent of the Secretary, and

(iii) such change shall be applied only on a cut-off basis for such expenditures and no adjustments under section 481(a) shall be made.

(C) REGULATIONS.—The Secretary of the Treasury (or the Secretary’s delegate) shall publish such guidance or regulations as may be necessary to carry out the purposes of this paragraph, including regulations or guidance allowing for the deduction allowed under subparagraph (A) in the case of taxpayers with taxable years beginning after December 31, 2024, and ending before the date of the enactment of this Act.

SEC. 70301. Full expensing for certain business property.

(a) Made permanent.—

(1) IN GENERAL.—Section 168(k)(2)(A) is amended by adding “and” at the end of clause (i), by striking “, and” at the end of clause (ii) and inserting a period, and by striking clause (iii).

(2) PROPERTY WITH LONGER PRODUCTION PERIODS.—Section 168(k)(2)(B) is amended—

(A) in clause (i), by striking subclauses (II) and (III) and redesignating subclauses (IV), (V), and (VI), as subclauses (II), (III), and (IV), respectively, and

(B) by striking clause (ii) and redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively.

(3) SELF-CONSTRUCTED PROPERTY.—Section 168(k)(2)(E) is amended by striking clause (i) and redesignating clauses (ii) and (iii) as clauses (i) and (ii), respectively.

(4) CERTAIN PLANTS.—Section 168(k)(5)(A) is amended by striking “planted before January 1, 2027, or is grafted before such date to a plant that has already been planted,” in the matter preceding clause (i) and inserting “planted or grafted”.

(5) CONFORMING AMENDMENTS.—

(A) Section 168(k)(2)(A)(ii) is amended by striking “clause (ii) of subparagraph (E)” and inserting “clause (i) of subparagraph (E)”.

(B) Section 168(k)(2)(C)(i) is amended by striking “and subclauses (II) and (III) of subparagraph (B)(i)”.

(C) Section 168(k)(2)(C)(ii) is amended by striking “subparagraph (B)(iii)” and inserting “subparagraph (B)(ii)”.

(D) Section 460(c)(6)(B) is amended by striking “which” and all that follows through the period and inserting “which has a recovery period of 7 years or less.”.

(b) 100 percent expensing.—

(1) IN GENERAL.—Section 168(k) is amended—

(A) in paragraph (1)(A), by striking “the applicable percentage” and inserting “100 percent”, and

(B) by striking paragraphs (6) and (8).

(2) CERTAIN PLANTS.—Section 168(k)(5)(A)(i) is amended by striking “the applicable percentage” and inserting “100 percent”.

(3) TRANSITIONAL ELECTION OF REDUCED PERCENTAGE.—Section 168(k)(10) is amended by striking subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by inserting before subparagraph (C) (as so redesignated) the following new subparagraphs:

“(A) IN GENERAL.—In the case of qualified property placed in service by the taxpayer during the first taxable year ending after January 19, 2025, if the taxpayer elects to have this paragraph apply for such taxable year, paragraph (1)(A) shall be applied—

“(i) in the case of property which is not described in clause (ii), by substituting ‘40 percent’ for ‘100 percent’, or

“(ii) in the case of property which is described in subparagraph (B) or (C) of paragraph (2), by substituting ‘60 percent’ for ‘100 percent’.

“(B) SPECIFIED PLANTS.—In the case of any specified plant planted or grafted by the taxpayer during the first taxable year ending after January 19, 2025, if the taxpayer elects to have this paragraph apply for such taxable year, paragraph (5)(A)(i) shall be applied by substituting ‘40 percent’ for ‘100 percent’.”.

(c) Effective date.—

(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by this section shall apply to property acquired after January 19, 2025.

(2) SPECIFIED PLANTS.—Except as provided in paragraph (3), in the case of any specified plant (as defined in section 168(k)(5)(B) of the Internal Revenue Code of 1986, as amended by this section), the amendments made by this section shall apply to such plants which are planted or grafted after January 19, 2025.

(3) TRANSITIONAL ELECTION OF REDUCED PERCENTAGE.—The amendment made by subsection (b)(3) shall apply to taxable years ending after January 19, 2025.

(4) ACQUISITION DATE DETERMINATION.—For purposes of paragraph (1), property shall not be treated as acquired after the date on which a written binding contract is entered into for such acquisition.

(a) Trump accounts.—

(1) IN GENERAL.—Subchapter F of chapter 1 is amended by adding at the end the following new part:

“PART IX—Trump accounts

“Sec. 530A. Trump accounts.

“SEC. 530A. Trump accounts.

“(a) General rule.—Except as provided in this section or under regulations or guidance established by the Secretary, a Trump account shall be treated for purposes of this title in the same manner as an individual retirement account under section 408(a).

“(b) Trump account.—For purposes of this section—

“(1) IN GENERAL.—The term ‘Trump account’ means an individual retirement account (as defined in section 408(a)) which is not designated as a Roth IRA and which meets the following requirements:

“(A) The account—

“(i) is created or organized by the Secretary for the exclusive benefit of an eligible individual or such eligible individual’s beneficiaries, or

“(ii) is—

“(I) created or organized in the United States for the exclusive benefit of an individual who has not attained the age of 18 before the end of the calendar year, or such individual’s beneficiaries, and

“(II) funded by a qualified rollover contribution.

“(B) The account is designated (in such manner as the Secretary shall prescribe) at the time of the establishment of the account as a Trump account.

“(C) The written governing instrument creating the account meets the following requirements:

“(i) No contribution will be accepted—

“(I) before the date that is 12 months after the date of the enactment of this section, or

“(II) in the case of a contribution made in any calendar year before the calendar year in which the account beneficiary attains age 18, if such contribution would result in aggregate contributions (other than exempt contributions) for such calendar year in excess of the contribution limit specified in subsection (c)(2)(A).

“(ii) Except as provided in subsection (d), no distribution will be allowed before the first day of the calendar year in which the account beneficiary attains age 18.

“(iii) No part of the account funds will be invested in any asset other than an eligible investment during any period before the first day of the calendar year in which the account beneficiary attains age 18.

“(2) ELIGIBLE INDIVIDUAL.—The term ‘eligible individual’ means any individual—

“(A) who has not attained the age of 18 before the close of the calendar year in which the election under subparagraph (C) is made,

“(B) for whom a social security number (within the meaning of section 24(h)(7)) has been issued before the date on which an election under subsection (C) is made, and

“(C) for whom—

“(i) an election is made under this subparagraph by the Secretary if the Secretary determines (based on information available to the Secretary from tax returns or otherwise) that such individual meets the requirements of subparagraphs (A) and (B) and no prior election has been made for such individual under clause (ii), or

“(ii) an election is made under this subparagraph by a person other than the Secretary (at such time and in such manner as the Secretary may prescribe) for the establishment of a Trump account if no prior election has been made for such individual under clause (i).

“(3) ELIGIBLE INVESTMENT.—

“(A) IN GENERAL.—The term ‘eligible investment’ means any mutual fund or exchange traded fund which—

“(i) tracks the returns of a qualified index,

“(ii) does not use leverage,

“(iii) does not have annual fees and expenses of more than 0.1 percent of the balance of the investment in the fund, and

“(iv) meets such other criteria as the Secretary determines appropriate for purposes of this section.

“(B) QUALIFIED INDEX.—The term ‘qualified index’ means—

“(i) the Standard and Poor’s 500 stock market index, or

“(ii) any other index—

“(I) which is comprised of equity investments in primarily United States companies, and

“(II) for which regulated futures contracts (as defined in section 1256(g)(1)) are traded on a qualified board or exchange (as defined in section 1256(g)(7)).

Such term shall not include any industry or sector-specific index, but may include an index based on market capitalization.

“(4) ACCOUNT BENEFICIARY.—The term ‘account beneficiary’ means the individual on whose behalf the Trump account was established.

“(c) Treatment of contributions.—

“(1) NO DEDUCTION ALLOWED.—No deduction shall be allowed under section 219 for any contribution which is made before the first day of the calendar year in which the account beneficiary attains age 18.

“(2) CONTRIBUTION LIMIT.—In the case of any contribution made before the calendar year in which the account beneficiary attains age 18—

“(A) IN GENERAL.—The aggregate amount of contributions (other than exempt contributions) for such calendar year shall not exceed $5,000.

“(B) EXEMPT CONTRIBUTION.—For purposes of this paragraph, the term ‘exempt contribution’ means—

“(i) a qualified rollover contribution,

“(ii) any qualified general contribution, or

“(iii) any contribution provided under section 6434.

“(C) COST-OF-LIVING ADJUSTMENT.—

“(i) IN GENERAL.—In the case of any taxable year after 2027, the $5,000 amount under subparagraph (A) shall be increased by an amount equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2026’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(ii) ROUNDING.—If any increase under this subparagraph is not a multiple of $100, such amount shall be rounded to the next lowest multiple of $100.

“(3) TIMING OF CONTRIBUTIONS.—Section 219(f)(3) shall not apply to any contribution made to a Trump account for any taxable year ending before the calendar year in which the account beneficiary attains age 18.

“(d) Distributions.—

“(1) IN GENERAL.—Except as otherwise provided in this subsection, no distribution shall be allowed before the first day of the calendar year in which the account beneficiary attains age 18.

“(2) TAX TREATMENT OF ALLOWABLE DISTRIBUTIONS.—For purposes of applying section 72 to any amount distributed from a Trump account, the investment in the contract shall not include—

“(A) any qualified general contribution,

“(B) any contribution provided under section 6434, and

“(C) the amount of any contribution which is excluded from gross income under section 128.

“(3) QUALIFIED ROLLOVER CONTRIBUTIONS.—Paragraph (1) shall not apply to any distribution which is a qualified rollover contribution and the amount of such distribution shall not be included in the gross income of the beneficiary.

“(4) QUALIFIED ABLE ROLLOVER CONTRIBUTIONS.—

“(A) IN GENERAL.—Paragraph (1) shall not apply to any distribution which is a qualified ABLE rollover contribution and the amount of such distribution shall not be included in the gross income of the beneficiary.

“(B) QUALIFIED ABLE ROLLOVER CONTRIBUTION.—For purposes of this section, the term ‘qualified ABLE rollover contribution’ means an amount which is paid during the calendar year in which the account beneficiary attains age 17 in a direct trustee-to-trustee transfer from a Trump account maintained for the benefit of the account beneficiary to an ABLE account (as defined in section 529A(e)(6)) for the benefit of the such account beneficiary, but only if the amount of such payment is equal to the entire balance of the Trump account from which the payment is made.

“(5) DISTRIBUTIONS OF EXCESS CONTRIBUTIONS.—In the case of any contribution which is made before the calendar year in which the account beneficiary attains age 18 and which is in excess of the limitation in effect under subsection (c)(2)(A) for the calendar year—

“(A) paragraph (1) shall not apply to the distribution of such excess,

“(B) the amount of such distribution shall not be included in gross income of the account beneficiary, and

“(C) the tax imposed by this chapter on the distributee for the taxable year in which the distribution is made shall be increased by 100 percent of the amount of net income attributable to such excess (determined without regard to subparagraph (B)).

“(6) TREATMENT OF DEATH OF ACCOUNT BENEFICIARY.—If, by reason of the death of the account beneficiary before the first day of the calendar year in which the account beneficiary attains age 18, any person acquires the account beneficiary’s interest in the Trump account—

“(A) paragraph (1) shall not apply,

“(B) such account shall cease to be a Trump account as of the date of death, and

“(C) an amount equal to the fair market value of the assets (reduced by the investment in the contract) in such account on such date shall—

“(i) if such person is not the estate of such beneficiary, be includible in such person’s gross income for the taxable year which includes such date, or

“(ii) if such person is the estate of such beneficiary, be includible in such beneficiary’s gross income for the last taxable year of such beneficiary.

“(e) Qualified rollover contribution.—For purposes of this section, the term ‘qualified rollover contribution’ means an amount which is paid in a direct trustee-to-trustee transfer from a Trump account maintained for the benefit of the account beneficiary to a Trump account maintained for such beneficiary, but only if the amount of such payment is equal to the entire balance of the Trump account from which the payment is made.

“(f) Qualified general contribution.—For purposes of this section—

“(1) IN GENERAL.—The term ‘qualified general contribution’ means any contribution which—

“(A) is made by the Secretary pursuant to a general funding contribution,

“(B) is made to the Trump account of an account beneficiary in the qualified class of account beneficiaries specified in the general funding contribution, and

“(C) is in an amount which is equal to the ratio of—

“(i) the amount of such general funding contribution, to

“(ii) the number of account beneficiaries in such qualified class.

“(2) GENERAL FUNDING CONTRIBUTION.—The term ‘general funding contribution’ means a contribution which—

“(A) is made by—

“(i) an entity described in section 170(c)(1) (other than a possession of the United States or a political subdivision thereof) or an Indian tribal government, or

“(ii) an organization described in section 501(c)(3) and exempt from tax under section 501(a), and

“(B) which specifies a qualified class of account beneficiaries to whom such contribution is to be distributed.

“(3) QUALIFIED CLASS.—

“(A) IN GENERAL.—The term ‘qualified class’ means any of the following:

“(i) All account beneficiaries who have not attained the age of 18 before the close of the calendar year in which the contribution is made.

“(ii) All account beneficiaries who have not attained the age of 18 before the close of the calendar year in which the contribution is made and who reside in one or more States or other qualified geographic areas specified by the terms of the general funding contribution.

“(iii) All account beneficiaries who have not attained the age of 18 before the close of the calendar year in which the contribution is made and who were born in one or more calendar years specified by the terms of the general funding contribution.

“(B) QUALIFIED GEOGRAPHIC AREA.—The term ‘qualified geographic area’ means any geographic area in which not less than 5,000 account beneficiaries reside and which is designated by the Secretary as a qualified geographic area under this subparagraph.

“(g) Trustee selection.—In the case of any Trump account created or organized by the Secretary, the Secretary shall take into account the following criteria in selecting the trustee:

“(1) The history of reliability and regulatory compliance of the trustee.

“(2) The customer service experience of the trustee.

“(3) The costs imposed by the trustee on the account or the account beneficiary.

“(h) Other special rules and coordination with individual retirement account rules.—

“(1) IN GENERAL.—The rules of subsections (k) and (p) of section 408 shall not apply to a Trump account, and the rules of subsections (d) and (i) of section 408 shall not apply to a Trump account for any taxable year beginning before the calendar year in which the account beneficiary attains age 18.

“(2) CUSTODIAL ACCOUNTS.—In the case of a Trump account, section 408(h) shall be applied by substituting ‘a Trump account described in section 530A(b)(1)’ for ‘an individual retirement account described in subsection (a)’.

“(3) CONTRIBUTIONS.—In the case of any taxable year beginning before the first day of the calendar year in which the account beneficiary attains age 18, a contribution to a Trump account shall not be taken into account in applying any contribution limit to any individual retirement plan other than a Trump account.

“(4) DISTRIBUTIONS.—Section 408(d)(2) shall be applied separately with respect to Trump Accounts and other individual retirement plans.

“(5) EXCESS CONTRIBUTIONS.—For purposes of applying section 4973(b) to a Trump account for any taxable year beginning before the first day of the calendar year in which the account beneficiary attains age 18, the term ‘excess contributions’ means the sum of—

“(A) the amount by which the amount contributed to the account for the calendar year in which taxable year begins exceeds the amount permitted to be contributed to the account under subsection (c)(2), and

“(B) the amount determined under this paragraph for the preceding taxable year.

For purposes of this paragraph, the excess contributions for a taxable year are reduced by the distributions to which subsection (d)(5) applies that are made during the taxable year or by the date prescribed by law (including extensions of time) for filing the account beneficiary’s return for the taxable year.

“(i) Reports.—

“(1) IN GENERAL.—The trustee of a Trump account shall make such reports regarding such account to the Secretary and to the beneficiary of the account at such time and in such manner as may be required by the Secretary. Such reports shall include information with respect to—

“(A) contributions (including the amount and source of any contribution in excess of $25 made from a person other than the Secretary, the account beneficiary, or the parent or legal guardian of the account beneficiary),

“(B) distributions (including distributions which are qualified rollover contributions),

“(C) the fair market value of the account,

“(D) the investment in the contract with respect to such account, and

“(E) such other matters as the Secretary may require.

“(2) QUALIFIED ROLLOVER CONTRIBUTIONS.—Not later than 30 days after the date of any qualified rollover contribution, the trustee of the Trump account to which the contribution was made shall make a report to the Secretary. Such report shall include—

“(A) the name, address, and social security number of the account beneficiary,

“(B) the name and address of such trustee,

“(C) the account number,

“(D) the routing number of the trustee, and

“(E) such other information as the Secretary may require.

“(3) PERIOD OF REPORTING.—This subsection shall not apply to any period after the calendar year in which the beneficiary attains age 17.”.

(2) QUALIFIED ABLE ROLLOVER CONTRIBUTIONS EXEMPT FROM ABLE CONTRIBUTION LIMITATION.—

(A) IN GENERAL.—Section 529A(b)(2)(B) is amended by inserting “or received in a qualified ABLE rollover contribution described in section 530A(d)(4)(B)” after “except as provided in the case of contributions under subsection (c)(1)(C)”.

(B) PROHIBITION ON EXCESS CONTRIBUTIONS.—The second sentence of section 529A(b)(6) is amended by inserting “but do not include any contributions received in a qualified ABLE rollover contribution described in section 530A(d)(4)(B)” before the period at the end.

(C) CONFORMING AMENDMENT.—Section 4973(h)(1) is amended by inserting “or contributions received in a qualified ABLE rollover contribution described in section 530A(d)(4)(B)” after “other than contributions under section 529A(c)(1)(C)”.

(3) FAILURE TO PROVIDE REPORTS ON TRUMP ACCOUNTS.—Section 6693(a)(2) is amended by striking “and” at the end of subparagraph (E), by striking the period at the end of subparagraph (F) and inserting “, and”, and by inserting after subparagraph (F) the following new subparagraph:

“(G) section 530A(i) (relating to Trump accounts).”.

(4) CLERICAL AMENDMENT.—

(A) The table of parts for subchapter F of chapter 1 is amended by adding at the end the following new item:

“PART IX—TRUMP ACCOUNTS

(b) Employer contributions.—

(1) IN GENERAL.—Part III of subchapter B of chapter 1 is amended by inserting after section 127 the following new section:

“SEC. 128. Employer contributions to Trump accounts.

“(a) In general.—Gross income of an employee does not include amounts paid by the employer as a contribution to the Trump account of such employee or of any dependent of such employee if the amounts are paid or incurred pursuant to a program which is described in subsection (c).

“(b) Limitation.—

“(1) IN GENERAL.—The amount which may be excluded under subsection (a) with respect to any employee shall not exceed $2,500.

“(2) INFLATION ADJUSTMENT.—

“(A) IN GENERAL.—In the case of any taxable year beginning after 2027, the $2,500 amount in paragraph (1) shall be increased by an amount equal to—

“(i) such dollar amount, multiplied by

“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins by substituting ‘calendar year 2026’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(B) ROUNDING.—If any increase determined under subparagraph (A) is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100.

“(c) Trump account contribution program.—For purposes of this section, a Trump account contribution program is a separate written plan of an employer for the exclusive benefit of his employees to provide contributions to the Trump accounts of such employees or dependents of such employees which meets requirements similar to the requirements of paragraphs (2), (3), (6), (7), and (8) of section 129(d).”.

(2) CLERICAL AMENDMENT.—The table of sections for part III of subchapter B of chapter 1 is amended by inserting after the item relating to section 127 the following new item:

“Sec. 128. Employer contributions to Trump accounts.”.

(c) Certain contributions excluded from gross income.—

(1) IN GENERAL.—Part III of subchapter B of chapter 1 is amended by inserting before section 140 the following new section:

“SEC. 139J. Certain contributions to Trump accounts.

“(a) In general.—Gross income of an account beneficiary shall not include any qualified general contribution to a Trump account of the account beneficiary.

“(b) Definitions.—Any term used in this section which is used in section 530A shall have the meaning given such term under section 530A.”.

(2) CLERICAL AMENDMENT.—The table of sections for part III of subchapter B is amended by inserting before the item relating to section 140 the following new item:

“Sec. 139J. Certain contributions to Trump accounts.”.

(d) Trump accounts contribution pilot program.—

(1) IN GENERAL.—Subchapter B of chapter 65 is amended by adding at the end the following new section:

“SEC. 6434. Trump accounts contribution pilot program.

“(a) In general.—In the case of an individual who makes an election under this section with respect to an eligible child of the individual, such eligible child shall be treated as making a payment against the tax imposed by subtitle A (for the taxable year for which the election was made) in an amount equal to $1,000.

“(b) Refund of payment.—The amount treated as a payment under subsection (a) shall be paid by the Secretary to the Trump account with respect to which such eligible child is the account beneficiary.

“(c) Eligible child.—For purposes of this section, the term ‘eligible child ’ means a qualifying child (as defined in section 152(c))—

“(1) who is born after December 31, 2024, and before January 1, 2029,

“(2) with respect to whom no prior election has been made under this section by such individual or any other individual, and

“(3) who is a United States citizen.

“(d) Election.—An election under this section shall be made at such time and in such manner as the Secretary shall provide.

“(e) Social security number required.—

“(1) IN GENERAL.—This section shall not apply to any taxpayer unless such individual includes with the election made under this section the social security number of the eligible child with respect to whom the election is made.

“(2) SOCIAL SECURITY NUMBER DEFINED.—For purposes of paragraph (1), the term ‘social security number’ shall have the meaning given such term in section 24(h)(7), determined by substituting ‘before the date of the election made under section 6434’ for ‘before the due date of such return’ in subparagraph (B) thereof.

“(f) Exception from reduction or offset.—Any payment made to any individual under this section shall not be—

“(1) subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 or any similar authority permitting offset, or

“(2) reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection.

“(g) Special rule regarding interest.—The period determined under section 6611(a) with respect to any payment under this section shall not begin before January 1, 2028.

“(h) Mirror Code possessions.—In the case of any possession of the United States with a mirror code tax system (as defined in section 24(k)), this section shall not be treated as part of the income tax laws of the United States for purposes of determining the income tax law of such possession unless such possession elects to have this section be so treated.

“(i) Definitions.—For purposes of this section, the terms ‘Trump account’ and ‘account beneficiary’ have the meaning given such terms in section 530A(b).”.

(2) PENALTY FOR NEGLIGENT CLAIM OR FRAUDULENT CLAIM.—Part I of subchapter A of chapter 68 is amended by adding at the end the following new section:

“SEC. 6659. Improper claim for Trump account contribution pilot program credit.

“(a) In general.—In the case of any individual who makes an election under section 6434 with respect to an individual who is not an eligible child of the taxpayer—

“(1) if such election was made due to negligence or disregard of the rules or regulations, there shall be imposed a penalty of $500, or

“(2) if such election was made due to fraud, there shall be imposed a penalty of $1,000.

“(b) Definitions.—

“(1) ELIGIBLE CHILD.—The term ‘eligible child’ has the meaning given such term under section 6434.

“(2) NEGLIGENCE; DISREGARD.—The terms ‘negligence’ and ‘disregard’ have the same meaning as when such terms are used in section 6662.”.

(3) OMISSION OF CORRECT SOCIAL SECURITY NUMBER TREATED AS MATHEMATICAL OR CLERICAL ERROR.—Section 6213(g)(2), as amended by the preceding provisions of this Act, is amended by striking “and” at the end of subparagraph (Y), by striking the period at the end of subparagraph (Z) and inserting “, and”, and by inserting after subparagraph (Z) the following new subparagraph:

“(AA) an omission of a correct social security number required under section 6434(e)(1) (relating to the Trump accounts contribution pilot program).”.

(4) CONFORMING AMENDMENTS.—

(A) The table of sections for subchapter B of chapter 65 is amended by adding at the end the following new item:

“Sec. 6434. Trump accounts contribution pilot program.”.

(B) The table of sections for part I of subchapter A of chapter 68 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, 2025.

(f) Funding.—In addition to amounts otherwise available, there is appropriated to the Department of the Treasury, out of any money in the Treasury not otherwise appropriated, $410,000,000, to remain available until September 30, 2034, to carry out the amendments made by this section.

(a) In general.—Section 163(h) is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:

“(4) SPECIAL RULES FOR TAXABLE YEARS 2025 THROUGH 2028 RELATING TO QUALIFIED PASSENGER VEHICLE LOAN INTEREST.—

“(A) IN GENERAL.—In the case of taxable years beginning after December 31, 2024, and before January 1, 2029, for purposes of this subsection the term ‘personal interest’ shall not include qualified passenger vehicle loan interest.

“(B) QUALIFIED PASSENGER VEHICLE LOAN INTEREST DEFINED.—

“(i) IN GENERAL.—For purposes of this paragraph, the term ‘qualified passenger vehicle loan interest’ means any interest 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 vehicle for personal use.

“(ii) EXCEPTIONS.—Such term shall not include any amount paid or incurred on any of the following:

“(I) A loan to finance fleet sales.

“(II) A loan incurred for the purchase of a commercial vehicle that is not used for personal purposes.

“(III) Any lease financing.

“(IV) A loan to finance the purchase of a vehicle with a salvage title.

“(V) A loan to finance the purchase of a vehicle intended to be used for scrap or parts.

“(iii) VIN REQUIREMENT.—Interest shall not be treated as qualified passenger vehicle loan interest under this paragraph unless the taxpayer includes the vehicle identification number of the applicable passenger vehicle described in clause (i) on the return of tax for the taxable year.

“(C) LIMITATIONS.—

“(i) DOLLAR LIMIT.—The amount of interest taken into account by a taxpayer under subparagraph (B) for any taxable year shall not exceed $10,000.

“(ii) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—

“(I) IN GENERAL.—The amount which is otherwise allowable as a deduction under subsection (a) as qualified 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 taxable year increased by any amount excluded from gross income under section 911, 931, or 933.

“(D) APPLICABLE PASSENGER VEHICLE.—The term ‘applicable passenger vehicle’ means any vehicle—

“(i) the original use of which commences with the taxpayer,

“(ii) which is manufactured primarily for use on public streets, roads, and highways (not including a vehicle operated exclusively on a rail or rails),

“(iii) which has at least 2 wheels,

“(iv) which is a car, minivan, van, sport utility vehicle, pickup truck, or motorcycle,

“(v) which is treated as a motor vehicle for purposes of title II of the Clean Air Act, and

“(vi) which has a gross vehicle weight rating of less than 14,000 pounds.

Such term shall not include any vehicle the final assembly of which did not occur within the United States.

“(E) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes of this paragraph—

“(i) FINAL ASSEMBLY.—For purposes of subparagraph (D), the term ‘final 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 delivered to a dealer with all component 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.

“(ii) TREATMENT OF REFINANCING.—Indebtedness described in subparagraph (B) shall include indebtedness that results from refinancing any indebtedness described in such subparagraph, and that is secured by a first lien on the applicable passenger vehicle with respect to which the refinanced indebtedness was incurred, but only to the extent the amount of such resulting indebtedness does not exceed the amount of such refinanced indebtedness.

“(iii) RELATED PARTIES.—Indebtedness 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 taxpayer.”.

(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 paragraph (5), by striking the period at the end of paragraph (6) and inserting “and”, and by adding at the end the following new paragraph:

“(7) so much of the deduction allowed by section 163(a) as is attributable to the exception under section 163(h)(4)(A).”.

(c) Reporting.—

(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 passenger vehicle loan interest received in trade or business from individuals.

“(a) In general.—Any person—

“(1) who is engaged in a trade or business, and

“(2) who, in the course of such trade or business, receives from any individual interest aggregating $600 or more for any calendar year on a specified passenger vehicle loan,

shall make the return described in subsection (b) with respect to each individual from whom such interest was received 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 prescribe, and

“(2) contains—

“(A) the name and address of the individual from whom the interest described in subsection (a)(2) was received,

“(B) the amount of such interest received for the calendar year,

“(C) the amount of outstanding principal on the specified passenger vehicle loan as of the beginning of such calendar year,

“(D) the date of the origination of such loan,

“(E) the year, make, model, and vehicle identification number of the applicable passenger vehicle which secures such loan (or such other description of such vehicle as the Secretary may prescribe), and

“(F) such other information as the Secretary may prescribe.

“(c) Statements to be furnished to individuals with respect to whom information is required.—Every person required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing—

“(1) the name, address, and phone number of the information contact of the person required to make such return, and

“(2) the information described in subparagraphs (B), (C), (D), and (E) of subsection (b)(2) with respect to such individual (and such information as is described in subsection (b)(2)(F) with respect to such individual as the Secretary may provide for purposes of this subsection).

The written statement required under the preceding sentence 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 appropriate to carry out the purposes of this section, including regulations or other guidance to prevent the duplicate reporting of information under this section.

“(f) Applicability.—No return shall be required under this section for any period to which section 163(h)(4) does not apply.”.

(2) PENALTIES.—Section 6724(d) is amended—

(A) in paragraph (1)(B), by striking “or” at the end of clause (xxvii), by striking “and” at the end of clause (xxviii) and inserting “or”, and by adding at the end the following new clause:

“(xxix) section 6050AA(a) (relating to returns relating to applicable passenger vehicle loan interest received in trade or business from individuals),”, and

(B) in paragraph (2), by striking “or” at the end of subparagraph (KK), by striking the period at the end of subparagraph (LL) and inserting “, or”, and by inserting after subparagraph (LL) the following new subparagraph:

“(MM) section 6050AA(c) (relating to statements relating to applicable passenger vehicle loan interest received in trade or business from individuals).”.

(d) Conforming amendments.—

(1) Section 56(e)(1)(B) is amended by striking “section 163(h)(4)” and inserting “section 163(h)(5)”.

(2) The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by adding at the end the following new item:

“Sec. 6050AA. Returns relating to applicable passenger vehicle loan interest received in trade or business from individuals. ”.

(e) Effective date.—The amendments made by this section shall apply to indebtedness incurred after December 31, 2024.

(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 following new section:

“SEC. 225. Qualified overtime compensation.

“(a) In general.—There shall be allowed as a deduction an amount equal to the qualified overtime compensation received during the taxable year and included on statements furnished to the individual pursuant to section 6041(d)(4) or 6051(a)(19).

“(b) Limitation.—

“(1) IN GENERAL.—The amount allowed as a deduction under this section for any taxable year shall not exceed $12,500 ($25,000 in the case of a joint return).

“(2) LIMITATION BASED ON ADJUSTED GROSS INCOME.—

“(A) IN GENERAL.—The amount allowable as a deduction under subsection (a) (after application of paragraph (1)) shall be reduced (but not below zero) by $100 for each $1,000 by which the taxpayer’s modified adjusted gross income exceeds $150,000 ($300,000 in the case of a joint return).

“(B) MODIFIED ADJUSTED GROSS INCOME.—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 excluded from gross income under section 911, 931, or 933.

“(c) Qualified overtime compensation.—

“(1) IN GENERAL.—For purposes of this section, the term ‘qualified overtime compensation’ means overtime compensation paid to an individual required under section 7 of the Fair Labor Standards Act of 1938 that is in excess of the regular rate (as used in such section) at which such individual is employed.

“(2) EXCLUSIONS.—Such term shall not include any qualified tip (as defined in section 224(d)).

“(d) Social security number required.—

“(1) IN GENERAL.—No deduction shall be allowed under this section unless the taxpayer includes on the return of tax for the taxable year such individual’s social security number.

“(2) SOCIAL SECURITY NUMBER DEFINED.—For purposes of paragraph (1), the term ‘social security number’ shall have the meaning given such term in section 24(h)(7).

“(e) Married individuals.—If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.

“(f) Regulations.—The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations or other guidance to prevent abuse of the deduction allowed by this section.

“(g) Termination.—No deduction shall be allowed under this section for any taxable year beginning after December 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 paragraph (4), by striking the period at the end of paragraph (5) and inserting “, and”, and by adding at the end the following new paragraph:

“(6) the deduction provided in section 225.”.

(c) Reporting.—

(1) REQUIREMENT TO INCLUDE OVERTIME COMPENSATION 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 paragraph:

“(19) the total amount of qualified overtime compensation (as defined in section 225(c)).”.

(2) PAYMENTS TO PERSONS NOT TREATED AS EMPLOYEES UNDER TAX LAWS.—

(A) STATEMENT FURNISHED TO SECRETARY.—Section 6041(a), as amended by section 70201(e)(1)(A), is amended by inserting “and a separate accounting of any amount of qualified overtime compensation (as defined in section 225(c))” after “occupation of the person receiving such tips”.

(B) STATEMENT FURNISHED TO PAYEE.—Section 6041(d), as amended by section 70201(e)(1)(B), is amended by striking “and” at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting “, and”, and by inserting after paragraph (3) the following new paragraph:

“(4) the portion of payments that are qualified overtime compensation (as defined in section 225(c)).”.

(d) Omission of correct social security number treated as mathematical or clerical error.—Section 6213(g)(2), as amended by the preceding provisions of this Act, is amended by striking “and” at the end of subparagraph (X), by striking the period at the end of subparagraph (Y) and inserting “, and”, and by inserting after subparagraph (Y) the following new subparagraph:

“(Z) an omission of a correct social security number required under section 225(d) (relating to deduction for qualified overtime).”.

(e) Clerical amendment.—The table of sections for part VII of subchapter B of chapter 1, as amended by the preceding provisions of this Act, is amended by redesignating the item relating to section 225 as an item relating to section 226 and by inserting after the item relating to section 224 the following new item:

“Sec. 225. Qualified overtime compensation. ”.

(f) Withholding.—The Secretary of the Treasury (or the Secretary’s delegate) shall modify the procedures prescribed under section 3402(a) of the Internal Revenue Code of 1986 for taxable years beginning after December 31, 2025, to take into account the deduction allowed under section 225 of such Code (as added by this Act).

(g) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2024.

(h) Transition rule.—In the case of qualified overtime compensation required to be reported for periods before January 1, 2026, persons required to file returns or statements under section 6051(a)(19), 6041(a), or 6041(d)(4) of the Internal Revenue Code of 1986 (as amended by this section) may approximate a separate accounting of amounts designated as qualified overtime compensation by any reasonable method specified by the Secretary.

(a) Deduction allowed.—Part VII of subchapter B of chapter 1 is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:

“SEC. 224. Qualified tips.

“(a) In general.—There shall be allowed as a deduction an amount equal to the qualified tips received during the taxable year that are included on statements furnished to the individual pursuant to section 6041(d)(3), 6041A(e)(3), 6050W(f)(2), or 6051(a)(18), or reported by the taxpayer on Form 4137 (or successor).

“(b) Limitation.—

“(1) IN GENERAL.—The amount allowed as a deduction under this section for any taxable year shall not exceed $25,000.

“(2) LIMITATION BASED ON ADJUSTED GROSS INCOME.—

“(A) IN GENERAL.—The amount allowable as a deduction under subsection (a) (after application of paragraph (1)) shall be reduced (but not below zero) by $100 for each $1,000 by which the taxpayer’s modified adjusted gross income exceeds $150,000 ($300,000 in the case of a joint return).

“(B) MODIFIED ADJUSTED GROSS INCOME.—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 excluded from gross income under section 911, 931, or 933.

“(c) Tips received in course of trade or business.—In the case of qualified tips received by an individual during any taxable year in the course of a trade or business (other than the trade or business of performing services as an employee) of such individual, such qualified tips shall be taken into account under subsection (a) only to the extent that the gross income for the taxpayer from such trade or business for such taxable year (including such qualified tips) exceeds the sum of the deductions (other than the deduction allowed under this section) allocable to the trade or business in which such qualified tips are received by the individual for such taxable year.

“(d) Qualified tips.—For purposes of this section—

“(1) IN GENERAL.—The term ‘qualified tips’ means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024, as provided by the Secretary.

“(2) EXCLUSIONS.—Such term shall not include any amount received by an individual unless—

“(A) such amount is paid voluntarily without any consequence in the event of nonpayment, is not the subject of negotiation, and is determined by the payor,

“(B) the trade or business in the course of which the individual receives such amount is not a specified service trade or business (as defined in section 199A(d)(2)), and

“(C) such other requirements as may be established by the Secretary in regulations or other guidance are satisfied.

For purposes of subparagraph (B), in the case of an individual receiving tips in the trade or business of performing services as an employee, such individual shall be treated as receiving tips in the course of a trade or business which is a specified service trade or business if the trade or business of the employer is a specified service trade or business.

“(3) CASH TIPS.—For purposes of paragraph (1), the term ‘cash tips’ includes tips received from customers that are paid in cash or charged and, in the case of an employee, tips received under any tip-sharing arrangement.

“(e) Social security number required.—

“(1) IN GENERAL.—No deduction shall be allowed under this section unless the taxpayer includes on the return of tax for the taxable year such individual’s social security number.

“(2) SOCIAL SECURITY NUMBER DEFINED.—For purposes of paragraph (1), the term ‘social security number’ shall have the meaning given such term in section 24(h)(7).

“(f) Married individuals.—If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.

“(g) Regulations.—The Secretary shall prescribe such regulations or other guidance as may be necessary to prevent reclassification of income as qualified tips, including regulations or other guidance to prevent abuse of the deduction allowed by this section.

“(h) Termination.—No deduction shall be allowed under this section for any taxable year beginning after December 31, 2028.”.

(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 paragraph (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 number treated as mathematical or clerical error.—Section 6213(g)(2), as amended by the preceding provisions of this Act, is amended by striking “and” at the end of subparagraph (W), by striking the period at the end of subparagraph (X) and inserting “, and”, and by inserting after subparagraph (X) the following new subparagraph:

“(Y) an omission of a correct social security number required under section 224(e) (relating to deduction for qualified tips).”.

(d) Exclusion from qualified business income.—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.”.

(e) Extension of tip credit to beauty service business.—

(1) IN GENERAL.—Section 45B(b)(2) is amended to read as follows:

“(2) APPLICATION ONLY TO CERTAIN LINES OF BUSINESS.—In applying paragraph (1) there shall be taken into account only tips received from customers or clients in connection with the following services:

“(A) The providing, delivering, or serving of food or beverages for consumption, if the tipping of employees delivering or serving food or 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

(B) by inserting “, and in the case of food or beverage establishments, as in effect on January 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 SECRETARY.—Section 6041(a) is amended by inserting “(including a separate accounting of any such amounts reasonably designated as cash tips and the occupation described in section 224(d)(1) of the person receiving such tips)” after “such gains, profits, and income”.

(B) STATEMENT FURNISHED TO PAYEE.—Section 6041(d) is amended by striking “and” at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting “, and”, and by inserting after paragraph (2) the following new paragraph:

“(3) in the case of compensation to non-employees, the portion of payments that have been reasonably designated as cash tips and the occupation described in section 224(d)(1) of the person receiving such tips.”.

(2) RETURNS FOR PAYMENTS MADE FOR SERVICES AND DIRECT SALES.—

(A) STATEMENT FURNISHED TO SECRETARY.—Section 6041A(a) is amended by inserting “(including a separate accounting of any such amounts reasonably designated as cash tips and the occupation described in section 224(d)(1) of the person receiving such tips)” after “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 period at the end of paragraph (2) and inserting “, and”, and by inserting after paragraph (2) the following new paragraph:

“(3) in the case of subsection (a), the portion of payments that have been reasonably designated as cash tips and the occupation described in section 224(d)(1) of the person receiving such tips.”.

(3) RETURNS RELATING TO THIRD PARTY SETTLEMENT ORGANIZATIONS.—

(A) STATEMENT FURNISHED TO SECRETARY.—Section 6050W(a) is amended by striking “and” at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting “and”, and by adding at the end the following new paragraph:

“(3) in the case of a third party settlement organization, the portion of reportable payment transactions that have been reasonably designated by payors as cash tips and the occupation described in section 224(d)(1) of the person receiving such tips.”.

(B) STATEMENT FURNISHED TO PAYEE.—Section 6050W(f)(2) is amended by inserting “(including a separate accounting of any such amounts that have been reasonably designated by payors as cash tips and the occupation described in section 224(d)(1) of the person receiving such tips)” after “reportable payment transactions”.

(4) RETURNS RELATED TO WAGES.—Section 6051(a) is amended by striking “and” at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting “, and”, and by inserting after paragraph (17) the following new paragraph:

“(18) the total amount of cash tips reported by the employee under section 6053(a) and the occupation described in section 224(d)(1) such person.”.

(g) Clerical amendment.—The table of sections for part VII of subchapter B of chapter 1 is amended by 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 traditionally 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 customarily and regularly received tips on or before December 31, 2024, for purposes of section 224(d)(1) of the Internal Revenue Code of 1986 (as added by subsection (a)).

(i) Withholding.—The Secretary of the Treasury (or the Secretary’s delegate) shall modify the procedures prescribed under section 3402(a) of the Internal Revenue Code of 1986 for taxable years beginning after December 31, 2025, to take into account the deduction allowed under section 224 of such Code (as added by this Act).

(j) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2024.

(k) Transition rule.—In the case of any cash tips required to be reported for periods before January 1, 2026, persons required to file returns or statements under section 6041(a), 6041(d)(3), 6041A(a), 6041A(e)(3), 6050W(a), or 6050W(f)(2) of the Internal Revenue Code of 1986 (as amended by this section) may approximate a separate accounting of amounts designated as cash tips by any reasonable method specified by the Secretary.