Congressman Mackenzie Introduces Bipartisan Holiday Bonus Tax Relief Act
Washington, D.C. — Today, Congressman Ryan Mackenzie (PA-07), representing the Lehigh Valley and the Poconos, introduced the Holiday Bonus Tax Relief Act of 2025 alongside Congressman Jared Moskowitz (FL-23). This bipartisan legislation would make up to $2,500 in holiday or end-of-year bonuses completely tax-free for American workers by exempting them from federal income tax.
The bill aims to support working families during the holiday season by delivering targeted, inflation-adjusted tax relief. Specifically, it excludes up to $2,500 per employee of a qualified November, December, or January bonus from gross income, and includes strong safeguards to prevent misuse.
“The holiday season can create financial strains for families, especially as so many work to recover from the price increases of recent years," said Congressman Mackenzie. “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.”
“If your employer gives you a holiday bonus, Washington, D.C., shouldn’t take a cut,” said Rep. 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.”
Key Provisions of the Holiday Bonus Tax Relief Act of 2025 include:
- Excludes up to $2,500 of a holiday or year-end bonus from federal income tax.
- Applies to bonuses paid in November, December, or January of the taxable year.
- Includes anti-abuse protections and authorizes the Treasury to issue guidance to prevent wage reclassification.
- Adjusts for inflation after 2026.
- Requires reporting of holiday bonuses on employee W-2s for transparency.
The legislation would take effect for bonuses paid on or after November 1, 2025.
Read the full bill text HERE.