H.R. 1833 — Working Families Tax Cut Act

This section renames the standard deduction as the guaranteed deduction throughout the Internal Revenue Code of 1986 (i.e., in IRC §63 and conforming amendments to multiple other sections), effective for taxable years beginning after December 31, 2025.

This section establishes a temporary bonus guaranteed deduction added to the guaranteed deduction under IRC §63(c)—which sets standard deduction amounts—for taxable years 2026 and 2027 (i.e., taxable years beginning after December 31, 2025, and before January 1, 2028). The bonus deduction is (1) $4,000 for joint returns or surviving spouses, (2) $3,000 for heads of household, or (3) $2,000 in any other case, with amounts after 2026 adjusted for inflation (using a cost-of-living adjustment determined under IRC §1(f)(3) with 2025 substituted as the base year and rounded to the next lowest multiple of $50). The bonus phases out (but not below zero) by 5% of modified adjusted gross income (i.e., adjusted gross income increased by amounts excluded under IRC §§911, 931, or 933) exceeding (1) $400,000 for joint returns or surviving spouses, (2) $300,000 for heads of household, or (3) $200,000 in any other case.