Employee Profit-Sharing Encouragement Act of 2025

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 6418 Introduced in House (IH)] <DOC> 119th CONGRESS 1st Session H. R. 6418 To amend the Internal Revenue Code of 1986 to deny the deduction for executive compensation unless the employer maintains profit-sharing distributions for employees. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES December 3, 2025 Mrs. Watson Coleman introduced the following bill; which was referred to the Committee on Ways and Means _______________________________________________________________________ A BILL To amend the Internal Revenue Code of 1986 to deny the deduction for executive compensation unless the employer maintains profit-sharing distributions for employees. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Employee Profit-Sharing Encouragement Act of 2025''. SEC. 2. DENIAL OF DEDUCTION FOR EXECUTIVE COMPENSATION UNLESS EMPLOYER MAINTAINS PROFIT-SHARING DISTRIBUTIONS. (a) In General.--Section 162 of the Internal Revenue Code of 1986 is amended by redesignating subsection (s) as subsection (t) and by inserting after subsection (r) the following new subsection: ``(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-- ``(