Referred to the Committee on Ways and Means, and in addition to the Committees on the Judiciary, and Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
The New Illegal Deduction Elimination Act prohibits employers from claiming tax deductions for wages paid to unauthorized immigrants. Under the bill, businesses cannot deduct these wages as business expenses on their tax returns, though employers who verify workers through the E-Verify program receive protection from this restriction. The legislation extends the time frame for the IRS to assess penalties for improper wage deductions from three years to six years and requires the Social Security Administration, Department of Homeland Security, and Treasury Department to share information to identify employers paying unauthorized workers. Additionally, the bill makes the E-Verify employment verification program permanent and expands its use to cover current employees (not just new hires), allowing employers to apply the program selectively across different states or hiring locations. The tax deduction changes apply to wages paid after December 31, 2024, with other provisions taking effect upon enactment.
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