United States 119th Congress Status: In Committee 2 D cosponsors

HR 6418 — Employee Profit-Sharing Encouragement Act of 2025

Last action — Referred to the House Committee on Ways and Means.

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed House
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill is in committee in the House. Introduced December 03, 2025. It must pass committee before a floor vote.

Next likely step: a committee vote, then a floor vote in the House.

Prognosis

Stalled 18% · moderate confidence

Where this bill stands today.

Odds of enactment

Low

How often bills like it became law.

  • In Committee

    Current position in the legislative process.

  • 2 sponsors

    1 primary, 1 co-sponsors signed on.

  • Single-party support

    Sponsorship is currently within one party (2 D).

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

In plain language

The bill was introduced in the House and referred to the Ways and Means Committee.

This bill has been introduced in the House of Representatives and is currently assigned to the Ways and Means Committee for consideration.

Bill Text

Sections of law this bill changes

1 section in 1 law

From the bill's own amending language, matched to the official United States Code (current through Public Law 119-124).

Normal taxes and surtaxes · 26 U.S.C. ch. 1 1 section
  • § 162 Trade or business expenses Amends

    26 U.S.C. § 162

    The law today

    (a) In general There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including— (1) a reasonable allowance for salaries or other compensation for personal services actually rendered; (2) traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business; and (3) rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity. For purposes of the preceding sentence, the place of residence of a Member of Congress (including any Delegate and Resident Commissioner) within the State, congressional district, or possession which he represents in Congress shall be considered his home, but amounts expended by such Members within each taxable year for living expenses shall not be deductible for income tax purposes. For purposes of paragraph (2), the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year. The preceding sentence shall not apply to any Federal employee during any period for which such employee is certified by the Attorney General (or the designee thereof) as traveling on behalf of the United States in temporary duty status to investigate or prosecute, or provide support services for the investigation or prosecution of, a Federal crime. (b) Charitable contributions and gifts excepted No deduction shall be allowed under subsection (a) for any contribution or gift which would be allowable as a deduction under section 170 were it not for the percentage limitations, the dollar limitations, or the requirements as to the time of payment, set forth in such section. (c) Illegal bribes, kickbacks, and other payments (1) Illegal payments to government officials or employees No deduction shall be allowed under subsection (a) for any payment made, directly or indirectly, to an official or employee of any government, or of any agency or instrumentality of any government, if the payment constitutes an illegal bribe or kickback or, if the payment is to an official or employee of a foreign government, the payment is unlawful under the Foreign Corrupt Practices Act of 1977. The burden of proof in respect of the issue, for the purposes of this paragraph, as to whether a payment constitutes an illegal bribe or kickback (or is unlawful under the Foreign Corrupt Practices Act of 1977) shall be upon the Secretary to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud). (2) Other illegal payments No deduction shall be allowed under subsection (a) for any payment (other than a payment described in paragraph (1)) made, directly or indirectly, to any person, if the payment constitutes an illegal bribe, illegal kickback, or other illegal payment under any law of the United States, or under any law of a State (but only if such State law is generally enforced), which subjects the payor to a criminal penalty or the loss of license or privilege to engage in a trade or business. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer. The burden of proof in respect of the issue, for purposes of this paragraph, as to whether a payment constitutes an illegal bribe, illegal kickback, or other illegal payment shall be upon the Secretary to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud). (3) Kickbacks, rebates, and bribes under medicare and medicaid No deduction shall be allowed under subsection (a) for any kickback, rebate, or bribe made by any pro...

    79 other bills also change this section · Follow it → Official text at uscode.house.gov ↗

How this bill changes current law

2 changes Share ↗

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill denies deductions for executive compensation unless employers maintain specified profit-sharing distributions for employees.

  • Section 162

    (s) Executive Compensation Paid by Employers Who Do Not Maintain Profit-Sharing Distributions.-- (1) In general.--In the case of a specified employer, no deduction shall be allowed under this chapter for applicable employee remuneration with respect to any highly compensated individual (within the meaning of section 105(h)) for any taxable year unless qualified profit-sharing distributions are made during such taxable year. (2) Qualified profit-sharing distributions.--For purposes of this subsection-- (A) In general.--The term `qualified profit-sharing distributions' means a cash distribution made pursuant to a written plan of the employer under which-- (i) employees (including part-time employees) who have been employed for at least 1 year as of the date of the distribution have a right to such distribution, and (ii) the amount of such distributions are defined under such plan on the basis of a measure of the receipts, profit, revenues, or earnings of such employer. (B) Minimum distribution requirements.--Such term shall not include any distributions made pursuant to such plan during the taxable year if the aggregate distributions made pursuant to such plan during such taxable year are less than 5 percent of the employer's net income for the taxable year as determined pursuant to the employer's books and records prepared in accordance with the employer's accounting procedures. (C) Nondiscrimination.--Such term shall not include any distributions made pursuant to such plan during the taxable year unless such plan satisfies requirements similar to the requirements of section 401(k)(3)(A)(ii) applied by treating the distributions made pursuant to the plan as though such distributions were contributions paid over to the trust referred to in such section. (D) Exception if distributions would jeopardize the business.--An employer shall not fail to be treated as making qualified profit-sharing distributions during the taxable year to the extent that such employer establishes to the satisfaction of the Secretary by clear and convincing evidence that making such distributions would jeopardize the ability of the employer to continue as a going concern. (3) Specified employer.--For purposes of this subsection-- (A) In general.--The term `specified employer' means, with respect to any taxable year, any employer which meets the gross receipts test of section 448(c) (determined without regard to paragraph (4) thereof) for such taxable year. (B) Application of gross receipts test to individuals, etc.--For purposes of subparagraph (A), in the case of any employer which is not a corporation or a partnership, the gross receipts test referred to in such subparagraph shall be applied in the same manner as if each trade or business of such employer were a corporation or partnership. (4) Applicable employee remuneration.--For purposes of this subsection, the term `applicable employee remuneration' has the meaning given such term by subsection (m)(4), determined without regard to subparagraph (B) thereof. (5) Controlled groups.--For purposes of this subsection, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one employer. (6) Coordination.--Rules similar to the rules of subparagraphs (D) and (E) of subsection (m)(4) shall apply for purposes of this subsection. (7) Authority to address abuse.--The Secretary shall have the authority to address any abuses by employers under this subsection, including, but not limited to, a reduction in employee compensation or benefits in conjunction with the payment of qualified profit-sharing distributions.

    This addition establishes new criteria under which executive compensation deductions are denied unless profit-sharing distributions are maintained.

  • Section 162

    subsection (s) → subsection (t)

    This change redesignates the existing subsection (s) to subsection (t) to accommodate the insertion of new regulations regarding executive compensation.

Action History

  1. Introduced in House

  2. Introduced in House

  3. Referred to the House Committee on Ways and Means.

Sponsors

Sponsorship breakdown

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1 sponsors · 1 co-sponsors · 545 not signed on

Sponsors (1)

Co-sponsors (1)

Not signed on (545)

545 members have not signed on to this bill.

Show all 545 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Subjects

taxation labor education
Cross-referencing the record. Reading this bill against every other bill in the corpus by meaning, not keywords. Only the first open is slow. It’s instant for you after this. Matching · Ranking · Engrossing

Frequently asked questions

Who sponsors HR 6418?
HR 6418 is sponsored by Watson Coleman, Bonnie (Democratic) and Omar, Ilhan (Democratic).
What is the current status of HR 6418?
This bill is in committee in the House. Introduced December 03, 2025. It must pass committee before a floor vote.
Where can I track HR 6418?
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