S. 2779: Tax Cut for Striking Workers Act of 2025 (119th Congress) Bill Summary

This bill, titled the Tax Cut for Striking Workers Act of 2025, proposes to amend the Internal Revenue Code in a way that affects how certain financial compensation is taxed during labor disputes. Here’s a breakdown of its main points:

Key Provisions

Change in Tax Treatment

The bill aims to exclude what are termed qualified strike benefits from being counted as gross income for tax purposes. This means that when workers receive compensation while on strike, that money won’t be taxed as income.
Definition of Qualified Strike Benefits

Qualified strike benefits are defined as compensation provided to a union member by their labor organization (which is a nonprofit under U.S. law) as partial replacement for lost wages due to a strike, lockout, or work stoppage related to labor disputes or rail labor issues.
Impact on Earned Income Tax Credit

The bill also seeks to amend the provisions concerning the Earned Income Tax Credit (EITC). It proposes that compensation received under this new section (related to strikes) should be taken into account when calculating eligibility for the EITC.
Administrative Updates

The bill includes clerical changes to update the U.S. tax code, specifying where this new section fits within existing laws.
Effective Date

If passed, the changes would apply to any compensation received after December 31, 2025.

Overall Impact

The main goal of this bill is to provide financial relief to workers who face income loss due to engaging in strikes or related labor actions. By classifying strike benefits as non-taxable income, the intention is to support workers during times of financial hardship in labor disputes.