Second Job Tax Relief Act of 2025: New Bill Lets Some Workers Sidestep Taxes on Side Hustles - For Now

The "Second Job Tax Relief Act of 2025" aims to give a tax break to people juggling multiple jobs. Here's the deal: if you qualify, money earned from a second job won't be counted as part of your gross income. That means less of your overall earnings get taxed. But there are catches, and it's not for everyone, and it's not forever.

Paycheck Perks and Limits

The core idea is to let people keep more of what they earn from side hustles. If your main gig pays you by the hour, and you've clocked at least 2,080 hours there (that's a full-time, 40-hour work week for a year, with no vacations or sick days.), you can designate that as your "primary employer." Then, income from a second job could be excluded from your gross income, up to a point. If you make over $100,000 (modified adjusted gross income, to be precise), the tax break starts shrinking. By the time you hit $150,000, it's gone completely. This is detailed in SEC. 2, which amends the Internal Revenue Code.

• Real-World Example: Imagine a barista, Sarah, who works full-time at a coffee shop (her primary employer, where she earns an hourly wage). She also teaches online coding classes a few nights a week. Under this bill, the money Sarah makes from teaching could be excluded from her gross income, potentially lowering her tax bill. But, if Sarah starts making big bucks, and her combined income goes over $100,000, that tax break starts to disappear.

Tax Code Twists

This bill doesn't just tweak income tax. It also messes with payroll taxes. SEC. 2 also changes how secondary employment income is treated for Social Security and unemployment taxes. Essentially, that income gets excluded from these taxes, too. To make up for the lost revenue, the bill says money will be transferred into the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, and the Federal Hospital Insurance Trust Fund.

The Fine Print (and Potential Problems)

• The Sunset Clause: This whole tax break setup is temporary. It's only good for five years after the bill is enacted. After that, it's gone, unless Congress does something to extend it. (SEC. 2)
• Who's Really "Primary?": The bill defines "primary employer" based on hourly pay and a minimum of 2,080 hours worked. That could leave out some people with different kinds of jobs or unusual work arrangements.
  • For instance, a freelance graphic designer who works mostly on project-based contracts, even if it's their main source of income, might not qualify.
• Potential for Abuse: The bill's wording could create loopholes. Some people might try to game the system by misclassifying income or tweaking their employment status to qualify for the tax break. There's also the risk of people taking on too many hours, which could lead to burnout. Some businesses may be incentivized to hire more part-time workers instead of full-time employees to allow employees to qualify for secondary employment tax benefits, which would shift the cost of benefits to the employee.

The Bottom Line

The Second Job Tax Relief Act is a mixed bag. It could offer real financial relief to some people working multiple jobs, at least for a while. But the income limits, the temporary nature of the deal, and the potential for complications mean it's not a simple win for everyone with a side hustle. And while it could put more money in some pockets, it also shifts around how some key government programs are funded, which could have long-term effects.