Section 1 Short title
This Act may be cited as the “Second Job Tax Relief Act of 2025”.
Second Job Tax Relief Act of 2025
A BILL
To amend the Internal Revenue Code of 1986 to exclude compensation from secondary employment for certain taxpayers from the income tax and payroll taxes.
Sec. 2 Exclusion of compensation for certain secondary employment from income and payroll tax
In general— Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139I the following new section:
“139J. Earned income from additional employment
“(a) In general—In the case of a qualifying taxpayer, gross income shall not include secondary employment compensation.
“(b) Phase-Out—The amount of compensation excluded from gross income under subsection (a) (determined without regard to this subsection) shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so excludable as—
“(1) the excess (if any) of—
“(A) the taxpayer’s modified adjusted gross income (as defined in section 36(b)(2)(B)) for such taxable year, over
“(B) $100,000 ($150,000 in the case of a married couple filing jointly), bears to
“(2) $50,000.
“(c) Secondary employment compensation
“(1) In general—For purposes of this section, the term “secondary employment compensation” means compensation received for employment during a taxable year with respect to which an individual has made an election under paragraph (2) for an employer other than the primary employer of such individual.
“(2) Primary employer
“(A) Election—A taxpayer may elect to designate, with respect to a taxable year, a primary employer if such individual was compensated on an hourly basis for not less than 2080 hours of work by such employer.
“(B) Definition—For purposes of this section, the term “primary employer” means, with respect to a taxable year, an employer designated by the taxpayer under subparagraph (A).
“(d) Sunset—Subsection (a) shall not apply to compensation earned in taxable years beginning after the date is that is 5 years after the date of the enactment of this section.”
Application to employment taxes—
Social security taxes—
In general— Section 3121(a) of such Code is amended by striking “or” at the end of paragraph (22), by striking the period at the end of paragraph (23) and inserting “; or”, and by inserting after paragraph (23) the following new paragraph:
“(24) any amount of compensation which is excludable from gross income under section 139J.”
Trust funds held harmless— There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund amounts equivalent to the reduction in revenues to each such Trust Fund, respectively, by reason of the amendment made by subparagraph (A) (determined without regard to this subparagraph). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had this section not been enacted.
Unemployment Taxes— Section 3306(b) of such Code is amended by striking “or” at the end of paragraph (19), by striking the period at the end of paragraph (20) and inserting “; or”, and by inserting after paragraph (20) the following new paragraph:
“(21) any amount of compensation which is excludable from gross income under section 139J.”
Wage withholding— Section 3401(a) of such Code is amended by striking “or” at the end of paragraph (22), by striking the period at the end of paragraph (23) and inserting “; or”, and by inserting after paragraph (23) the following new paragraph:
“(24) any amount of compensation which is excludable from gross income under section 139J.”
Clerical amendment— The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139I the following new item:
Effective date— The amendments made by this section shall apply to amounts received after the date of the enactment of this Act.