S 2716 — You Earned It, You Keep It Act

Bill Text

• Introduced Introduced in Senate Current html September 04, 2025

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The bill amends the Internal Revenue Code to modify the treatment of wages and self-employment income in relation to the contribution and benefit base, particularly exempting income above $250,000 from being considered wages for Social Security tax purposes, and repeals the inclusion of social security benefits in gross income.

• Section 86 of the Internal Revenue Code of 1986

  This section shall not apply to any taxable year beginning after the date of the enactment of this subsection.

  Repeals the inclusion of social security benefits in gross income for taxable years after enactment.

• Section 3121

  paragraph (1)

  Removes the limitation on the amount of wages for Social Security taxation.

• Section 3121

  In general.--In the case of any calendar year in which the contribution and benefit base (as determined under section 230 of the Social Security Act) is less than $250,000, for purposes of the taxes imposed by sections 3101(a) and 3111(a), the term `wages' does not include that part of the remuneration which, after remuneration equal to such contribution and benefit base with respect to employment has been paid to an individual by an employer during the calendar year with respect to which such contribution and benefit base is effective, is paid to such individual by such employer during the calendar year.

  Establishes a new definition of wages for taxation that excludes earnings over $250,000 after 2025.

• Section 3231(e)(2)(A)

  in the case of any calendar year in which the contribution and benefit base (as determined under section 230 of the Social Security Act) is less than $250,000, clause (i) shall not apply to that part of the remuneration paid to an individual after remuneration of $250,000 for services rendered as an employee has been paid to such individual by an employer.

  Modifies railroad retirement tax calculation to exclude remuneration over $250,000 for certain terms, aligning with the changes made for Social Security.

• Section 1402(b)

  The term `self-employment income' means the net earnings from self-employment derived by an individual, except that such term shall not include net earnings from self-employment if such net earnings for the taxable year are less than $400.

  Updates definition of self-employment income to clarify exclusion of earnings under certain thresholds.

• Section 1402(b)(2)

  For purposes of section 1401(a), the term `self employment income' shall not exceed the sum of the total compensation not in excess of the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective for the calendar year in which such taxable year begins, reduced by the amount of wages not in excess of such base paid to such individual during the taxable year.

  Limits self-employment income for Social Security tax calculation based on the contribution and benefit base.

• Section 211(b)(1)

  For any taxable year beginning in any calendar year after 2025, an amount equal to-- (i) $250,000, reduced (but not below zero) by (ii) the sum of-- (I) the part of the net earnings from self-employment (if any) which is not in excess of-- (aa) the amount equal to the contribution and benefit base (as determined under section 230) which is effective for the calendar year in which such taxable year begins, minus (bb) the amount of the wages paid to such individual during such taxable year.

  Changes the determination of self-employment income to only account for earnings below a certain threshold after 2025.

Action History

1. September 04, 2025

   Introduced in Senate

2. September 04, 2025

   Read twice and referred to the Committee on Finance.

Sponsors

• Ruben Gallego · Primary

Subjects