H.R.560 - Second Job Tax Relief Act of 2025 (119th Congress)
Summary
H.R. 560, the Second Job Tax Relief Act of 2025, proposes to amend the Internal Revenue Code of 1986 to exclude compensation from secondary employment from income and payroll taxes for certain taxpayers. This exclusion would apply to individuals who work a minimum of 2080 hours per year for their primary employer and elect to designate that employer as their primary employer. The exclusion phases out for taxpayers with modified adjusted gross income over $100,000 ($150,000 for married couples filing jointly).
Expected Effects
The bill aims to provide tax relief to individuals holding secondary employment, potentially incentivizing work and increasing disposable income. However, it also introduces complexity into the tax code and could reduce government revenue. The sunset clause limits the exclusion to compensation earned within 5 years of the enactment date.
Potential Benefits
- Increased disposable income for individuals with secondary employment.
- Potential incentive to work more hours and participate in the labor force.
- Simplification of tax filing for those eligible for the exclusion.
- May encourage entrepreneurship and side hustles.
- Targeted tax relief for lower and middle-income individuals with second jobs.
Potential Disadvantages
- Reduced government revenue due to tax exclusion.
- Increased complexity in the tax code, requiring taxpayers to track primary and secondary employment income.
- Potential for tax avoidance or gaming of the system.
- The phase-out may create a disincentive to earn more income for those near the income threshold.
- The sunset clause creates uncertainty and requires future legislative action to extend or make the exclusion permanent.
Most Disadvantaged Areas:
Constitutional Alignment
The bill aligns with the general welfare clause of the Constitution (Preamble) by aiming to improve the financial well-being of certain taxpayers. Article I, Section 8 grants Congress the power to lay and collect taxes, and this bill represents a modification of the existing tax laws. The bill does not appear to infringe upon any specific rights or liberties guaranteed by the Constitution or its amendments.
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).