This legislative proposal aims to amend the Internal Revenue Code of 1986 by creating a new section, 139M, to exclude certain holiday bonuses from an individual's gross income. It defines a "qualified holiday bonus" as any holiday, end-of-year, or similar bonus paid by an employer to an employee during the months of January, November, or December. The bill establishes a limitation on this exclusion, allowing individuals to exclude up to $2,500 in qualified holiday bonuses per taxable year, with this amount subject to annual inflation adjustment after 2026. This provision is designed to provide tax relief for employees receiving such bonuses. To ensure proper implementation and prevent abuse, the legislation mandates that qualified holiday bonuses be reported on an employee's Form W-2. Additionally, the Secretary of the Treasury is directed to prescribe regulations to prevent the reclassification of other income and deter abuse of this new tax exclusion, which applies to bonuses received on or after November 1, 2025.