The Holiday Bonus Tax Relief Act allows employees to keep more of their holiday bonuses by not counting them as taxable income. This change helps workers keep more money during the holiday season.
If you receive a holiday bonus, you could save money on your taxes by excluding it from your taxable income.
Who this affects
Employees receiving bonuses
What changes is this bill making?
1This bill excludes holiday bonuses from taxable income.
2Employees can exclude up to $2,500 in holiday bonuses from their gross income.
3The exclusion applies to bonuses paid in January, November, or December.
4The exclusion amount will increase with inflation starting in 2026.
5Employers must report holiday bonuses on employee W-2 forms.
