(a) In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting before section 140 the following new section:

139M. K–12 public school teacher wages

(a) In general

In the case of an individual, gross income shall not include so much of the wages received by such individual with respect to employment as an eligible educator as does not exceed $50,000.

(b) Definitions and special rules

For purposes of this section—

(1) Eligible educator

(A) In general

The term eligible educator means, with respect to any taxable year, an individual who for at least 900 hours during a school year ending during the taxable year is a kindergarten through grade 12 teacher, instructor, counselor, or aide in a public elementary or secondary school.

(B) Public school

(i) In general

The term elementary or secondary school means any school which provides elementary education or secondary education (including a charter school), as determined under State law.

(ii) Public school

The term public elementary or secondary school means any school which provides such education at public expense, under public supervision and direction, and without tuition charge.

(2) Increased limit for certain schools

(A) In general

Subsection (a) shall be applied by substituting $65,000 for $50,000 with respect to an individual in the case of each of the following:

(i)

An eligible educator who meets the 900 hour requirement under paragraph (1)(A) for the taxable year with respect to a school not less than 75 percent of the students of which are eligible for free or reduced-cost lunches under the school lunch program established under the National School Lunch Act.

(ii)

An eligible educator who meets the 900 hour requirement under paragraph (1)(A) for the taxable year with respect to a school located in a rural area.

(iii)

An eligible educator who meets the 900 hour requirement under paragraph (1)(A) for the taxable year as a teacher, instructor, or aid in special education or science, technology, engineering, or mathematics.

(B) Rural area

For purposes of this paragraph, the term rural area any area other than—

(i)

city or town that has a population of greater than 50,000 inhabitants, and

(ii)

any urbanized area contiguous and adjacent to a city or town described in clause (i).

(3) Wages

The term wages means all remuneration for services performed by an employee for the employee’s employer, but only to the extent includible in gross income of the individual.

(c) Regulations

The Secretary shall prescribe such rules as may be necessary to carry out the purposes of this section, including a process through which elementary and secondary schools can provide to eligible educators and the Secretary statements demonstrating an individual as having met for any period the requirements of subsection (b)(1)(A) and any of the requirements of clause (i), (ii), or (iii) of subsection (b)(2)(A).

(b) Conforming amendment

The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting before the item relating to section 140 the following new item:

(c) Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2025.