Section 1 Short title
This Act may be cited as the “Tax Cuts for Working Families Act”.
Tax Cuts for Working Families Act
A BILL
To amend the Internal Revenue Code of 1986 to rename the standard deduction the guaranteed deduction, and to add a bonus amount to the guaranteed deduction for taxable years 2024 and 2025.
Sec. 2 Standard deduction renamed guaranteed deduction
by striking “standard deduction” each place it appears and inserting “guaranteed deduction”, and
in subsection (c)—
in the heading, by striking “Standard deduction” and inserting “Guaranteed deduction”,
in the heading of paragraph (2), by striking “standard deduction” and inserting “guaranteed deduction”,
in the heading of paragraph (3), by striking “standard deduction” and inserting “guaranteed deduction”,
in the heading of paragraph (5), by striking “standard deduction” and inserting “guaranteed deduction”,
in the heading of paragraph (6), by striking “standard deduction” and inserting “guaranteed deduction”, and
in the heading of paragraph (7)(A), by striking “standard deduction” and inserting “guaranteed deduction”.
Conforming amendments—
Section 1(g)(4)(A) of such Code is amended by striking “standard deduction” and inserting “guaranteed deduction”.
Section 56(b)(1)(D) of such Code is amended—
in the heading, by striking “Standard deduction” and inserting “guaranteed deduction”, and
by striking “standard deduction” and inserting “guaranteed deduction”.
Section 861(b) of such Code is amended by striking “standard deduction” and inserting “guaranteed deduction”.
Section 862(b) of such Code is amended by striking “standard deduction” and inserting “guaranteed deduction”.
Section 1398(c) of such Code is amended—
in the heading, by striking “standard deduction” and inserting “guaranteed deduction”,
in the heading of paragraph (3), by striking “standard deduction” and inserting “guaranteed deduction”, and
by striking “standard deduction” and inserting “guaranteed deduction”.
Section 3402 of such Code is amended by striking “standard deduction” each place it appears and inserting “guaranteed deduction”.
Section 6012 of such Code is amended by striking “standard deduction” each place it appears and inserting “guaranteed deduction”.
Section 6013(b)(3)(A) of such Code is amended by striking “standard deduction” and inserting “guaranteed deduction”.
Section 6014(b)(4) of such Code is amended by striking “standard deduction” and inserting “guaranteed deduction”.
Section 6334 of such Code is amended by striking “standard deduction” each place it appears and inserting “guaranteed deduction”.
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2023.
Sec. 3 Bonus guaranteed deduction for 2024 and 2025
In general— Section 63(c) of the Internal Revenue Code of 1986 (as amended by section 2) is amended by adding at the end the following new paragraph:
“(8) Bonus guaranteed deduction for taxable years 2024 and 2025
“(A) In general—In the case of a taxable year beginning after December 31, 2023, and before January 1, 2026, the guaranteed deduction shall be increased by the amount of the bonus guaranteed deduction.
“(B) Bonus guaranteed deduction—For purposes of this paragraph, the bonus guaranteed deduction is—
“(i) twice the dollar amount in effect under clause (iii) in the case of a joint return or a surviving spouse (as defined in section 2(a)),
“(ii) $3,000 in the case of a head of household, and
“(iii) $2,000 in any other case.
“(C) Adjustment for inflation—In the case of a taxable year beginning after 2024, the dollar amounts in clauses (ii) and (iii) of subparagraph (B) shall each be increased by an amount equal to—
“(i) such dollar amount, multiplied by
“(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting “2023” for “2016” in subparagraph (A)(ii) thereof.
“(D) Limitation on bonus guaranteed deduction based on modified adjusted gross income
“(i) In general—The bonus guaranteed deduction determined under subparagraph (B) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer's modified adjusted gross income as exceeds the threshold amount. For purposes of the preceding sentence, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.
“(ii) Threshold amount—For purposes of clause (i), the threshold amount is—
“(I) $400,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)),
“(II) $300,000 in the case of a head of household, and
“(III) $200,000 in any other case.
“(E) Bonus guaranteed deduction not allowed to dependents—In the case of any individual with respect to whom paragraph (5) applies for any taxable year, subparagraph (A) shall not apply.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2023.