Moskowitz and Mackenzie Introduce Bipartisan Holiday Bonus Tax Relief Act
WASHINGTON, DC — Earlier this month, Congressman Jared Moskowitz (D-FL-23) and Congressman Ryan Mackenzie (R-PA-07) introduced the Holiday Bonus Tax Relief Act of 2025, a bipartisan bill to exempt up to $2,500 of holiday or end-of-year bonuses from federal income tax and deliver targeted relief to working families during the most expensive time of the year.
The legislation applies to qualified bonuses paid in November, December, or January, ensuring workers can keep more of their hard-earned pay around the holidays. The bill also includes strong safeguards to prevent abuse, including Treasury Department authority to stop the reclassification of regular wages as bonuses for tax avoidance purposes.
“If your employer gives you a holiday bonus, Washington, D.C., shouldn’t take a cut,” said Congressman Moskowitz. “This bipartisan, pro-worker, pro-family legislation makes sure workers can keep more of their year-end bonus when they need it most: around the holidays. This is the anti-Grinch bill, and we should pass it immediately.”
“The holiday season can create financial strains for families, especially as so many work to recover from the price increases of recent years. The Holiday Bonus Tax Relief Act will help workers keep more of what they earn and reward the extra effort so many put in at the end of the year. It’s a commonsense way to put more money back in people’s pockets and reduce holiday stress,” said Congressman Mackenzie.
The Holiday Bonus Tax Relief Act adjusts the $2,500 exclusion for inflation beginning after 2026 and requires qualified bonuses to be clearly reported on employees’ W-2 forms to promote transparency and accountability.
By delivering straightforward, responsible tax relief, the bill puts money directly back into workers’ pockets without creating loopholes or gimmicks.
The legislation would take effect for qualified bonuses paid on or after November 1, 2025.
For more information on the Holiday Bonus Tax Relief Act of 2025, click HERE.