May 7, 2025
Ms. Moore of Wisconsin (for herself, Mr. Davis of Illinois, Ms. Chu, Ms. Velázquez, Ms. McCollum, and Mr. Latimer) introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to modify the qualified business income deduction.
Section 1. Short title
This Act may be cited as the Mom and Pop Tax Relief Act
.
Sec. 2. Modification of 199A deduction
(a) Deduction allowed for first $25,000 of qualified business income
(1) In general
Section 199A(b)(1) of the Internal Revenue Code of 1986 is amended to read as follows:
(1) In general
The term combined qualified business income amount means, with respect to any taxable year, an amount equal to the lesser of—
(A)
the sum of the taxpayer’s qualified business income for each qualified trade or business carried on by the taxpayer, or
(B)
$25,000.
(2) Conforming amendments
(A)
Section 199A(a)(2) of such Code is amended by striking 20 percent of
.
(B)
Section 199A(b) of such Code is amended by striking paragraph (2).
(b) Consolidated taxpayer level adjusted gross income limitation
Section 199A(b) of such Code, as amended by subsection (a), is amended—
(1)
by striking paragraph (3), and
(2)
by inserting after paragraph (1) the following new paragraph:
(2) Adjusted gross income limitation
The combined qualified business income of the taxpayer for the taxable year shall be reduced (but not below zero) by so much of the amount by which the adjusted gross income of the taxpayer exceeds $200,000 ($400,000 in the case of a joint return).
(c) Simplification with respect to loss carryover
Section 199(c) of such Code is amended by striking paragraph (2).
(d) Other conforming amendments
(1)
(A)
Section 199A(b) of such Code is amended by striking paragraph (4).
(B)
Section 199A(g)(1)(B)(ii) of such Code is amended to read as follows:
(ii) W–2 wages
For purposes of this subparagraph—
(I) In general
The term W–2 wages means, with respect to any person for any taxable year of such person, the amounts described in paragraphs (3) and (8) of section 6051(a) paid by such person with respect to employment of employees by such person during the calendar year ending during such taxable year.
(II) Must be properly allocable to domestic production gross receipts
The W–2 wages of the taxpayer shall not include any amount which is not properly allocable to domestic production gross receipts for purposes of paragraph (3)(A).
(III) Return Requirement
Such term shall not include any amount which is not properly included in a return filed with the Social Security Administration on or before the 60th day after the due date (including extensions) for such return.
(C)
Section 199A(f)(1) of such Code is amended—
(i)
by inserting and
at the end of subparagraph (A)(i),
(ii)
by striking , and
at the end of subparagraph (A)(ii),
(iii)
by striking clause (iii),
(iv)
by striking For purposes of clause (iii)
and all that follows through For purposes of this subparagraph
and inserting For purposes of this subparagraph
, and
(v)
by striking subparagraph (B) and redesignating subparagraph (C) as subparagraph (B).
(2)
(A)
Section 199A(b) of such Code is amended by striking paragraph (5).
(B)
Section 199A(g)(5) of such Code is amended by adding at the end the following new subparagraph:
(F) Acquisitions, Dispositions, and Short Taxable Years
The Secretary shall provide for the application of this subsection in cases of a short taxable year or where the taxpayer acquires, or disposes of, the major portion of a trade or business or the major portion of a separate unit of a trade or business during the taxable year.
(3)
Section 199A(b) of such Code is amended by striking paragraph (6).
(4)
(A)
Section 199A(b) of such Code is amended by redesignating paragraph (7) as paragraph (3).
(B)
Section 199A(b)(3) of such Code (as so redesignated) is amended by striking under paragraph (2)
and inserting under paragraph (1)(A)
.
(5)
Section 199A(d) of such Code is amended to read as follows:
(d) Qualified trade or business
For purposes of this section, the term qualified trade or business means any trade or business other than the trade or business of performing services as an employee.
(6)
Section 199A(e) of such Code is amended to read as follows:
(e) Taxable income defined
For purposes of this section, except as otherwise provided in subsection (g)(2)(B), taxable income shall be computed without regard to any deduction allowable under this section.
(e) Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2025.