H.R.1691 - Employee Business Expense Deduction Reinstatement Act of 2025 (119th Congress)
Summary
H.R.1691, the "Employee Business Expense Deduction Reinstatement Act of 2025," aims to amend the Internal Revenue Code of 1986. The bill seeks to allow unreimbursed employee expenses to be taken into account as miscellaneous itemized deductions. This reverses a provision of the Tax Cuts and Jobs Act (TCJA) that had eliminated this deduction.
Expected Effects
If enacted, H.R.1691 would permit employees to deduct 85% of unreimbursed food, lodging, travel, or transportation expenses as miscellaneous itemized deductions. The bill also modifies the floor for these deductions, changing it from 2% to 1% of adjusted gross income. Furthermore, it extends the statute of limitations for claiming refunds related to these changes.
Potential Benefits
- Allows employees to deduct a portion of their unreimbursed business expenses, potentially reducing their tax burden.
- Could incentivize business travel and related spending, providing a boost to certain sectors.
- Provides a mechanism for employees to recoup some costs associated with job-related activities.
- The extension of the statute of limitations allows taxpayers additional time to claim refunds.
- May simplify tax filing for some individuals who track and deduct these expenses.
Potential Disadvantages
- The deduction is limited to 85% of expenses, meaning employees still bear a portion of the cost.
- Increased complexity for taxpayers who must track and calculate these deductions.
- Potential for increased tax avoidance or errors in claiming deductions.
- The 1% floor may still exclude some lower-income individuals from benefiting.
- Could slightly reduce overall tax revenue for the government.
Constitutional Alignment
The bill aligns with the constitutional power of Congress to lay and collect taxes, as outlined in Article I, Section 8, Clause 1. It does not appear to infringe upon any specific constitutional rights or limitations. The bill pertains to tax policy, which falls under the purview of Congress's legislative authority.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).