Introduced in Senate — S. 2779

119th CONGRESS

1st Session

S. 2779

IN THE SENATE OF THE UNITED STATES

September 11, 2025

Mr. Gallego (for himself, Mr. Wyden, Mr. Fetterman, Mrs. Gillibrand, Mr. Van Hollen, Mr. Blumenthal, Mr. Booker, Mr. Merkley, Mr. Schatz, and Ms. Baldwin) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to exclude strike benefits from gross income.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

Section 1. Short title

This Act may be cited as the Tax Cut for Striking Workers Act of 2025.

Sec. 2. Strike benefits

(a) In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986, as amended by Public Law 119–21, is amended by inserting after section 139L the following new section:

139M. Compensation for lost wages relating to a strike, lockout, or work stoppage
(a) In general
In the case of an individual, gross income shall not include qualified strike benefits.
(b) Qualified strike benefits
For purposes of this section, the term qualified strike benefits means compensation provided by a labor organization described in section 501(c)(5) and exempt from tax under section 501(a) to a member of such organization if such compensation is provided as a replacement, in whole or in part, for compensation not received by such member from such member’s employer as the result of a strike or lockout arising from a labor dispute (as defined in section 2 of the National Labor Relations Act), or a work stoppage under the Railway Labor Act.

(b) Treatment under earned income tax credit

Section 32(c)(2)(B)(vi) of the Internal Revenue Code of 1986 is amended by inserting or 139M after by reason of section 112.

(c) Clerical amendment

The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986, as amended by Public Law 119–21, is amended by inserting after the item relating to section 139L the following new item:

Sec. 139M. Compensation for lost wages relating to a strike, lockout, or work stoppage.

(d) Effective date

The amendments made by this section shall apply to compensation received after December 31, 2025.