(a) In general

Section 199A of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(j) Enhanced deduction for qualified domestic manufacturers

(1) In general

In the case of any qualified domestic manufacturer—

(A)

subsections (a)(2) and (b)(2)(A) shall each be applied by substituting 30 percent for 20 percent, and

(B)

subsection (b)(2)(B)(i) shall be applied by substituting 100 percent for 50 percent.

(2) Qualified domestic manufacturer

For purposes of this subsection—

(A) In general

The term qualified domestic manufacturer means, with respect to any taxable year, any taxpayer with respect to whom at least 85 percent of the combined qualified business income amount for such taxable year is derived from a qualified domestic manufacturing trade or business.

(B) Qualified domestic manufacturing trade or business

(i) In general

The term qualified domestic manufacturing trade or business means any qualified trade or business—

(I)

which manufactures tangible property, and

(II)

with respect to which at least 20 percent of the cost of goods sold for the taxable year that are allocable to qualified gross receipts are attributable to labor and overhead expenses incurred within the United States (determined under regulations prescribed by the Secretary).

(ii) Qualified gross receipts

The term qualified gross receipts means, with respect to any taxable year, the gross receipts of the taxpayer during such taxable year which are derived from any lease, rental, license, sale, exchange, or other disposition of any tangible property referred to in clause (i)(I).

(3) Regulations

The Secretary shall prescribe such regulations as are necessary to carry out the purposes of this subsection.

(b) Taxable income computation modified

Section 199A(e)(1) of such Code is amended by striking shall be computed and all that follows, and inserting the following:

shall be computed—

(A)

without regard to section 68,

(B)

without regard to any deduction allowable under this section, and

(C)

in the case of a taxpayer who, with respect to any taxable year, elects to itemize deductions for such taxable year, without regard to any deduction allowable under section 170.

(c) Effective date

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