Congress·In Committee·H.R. 7559

To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.

New Bill Targets Tax Breaks for Companies That Outsource Services to Foreign Workers

5 months ago·View on Congress.gov·Read full text

Part of: U.S. Lawmakers Move to End Tax Discounts on Corporate Overseas Profits

Legislative Progress

House

Senate

President

Law

Key Points

This bill would stop companies from subtracting the cost of foreign labor from their taxes if that labor is used to serve customers in the United States.
Under current law, businesses can often lower their tax bills by deducting the money they spend on services, even if those services are performed by workers in other countries.
The proposal defines 'outsourcing payments' as fees or service charges paid to foreign individuals or companies for work that benefits people living in the U.S.
If a company uses foreign services for both U.S. and international customers, the bill would only block the tax deduction for the portion of the work that goes to Americans.
The change is intended to make it more expensive for companies to move service jobs overseas, potentially encouraging them to hire more workers within the United States.
If this becomes law, the new rules would apply to all payments made after December 31, 2025.

TaxesLabor EmploymentEconomy Finance

Impact Analysis

Personal Impact

Small businesses that use foreign contractors or outsourced services to keep costs down — like overseas call centers, IT support, or customer service — would lose the ability to deduct those expenses from their taxes. This could significantly increase their effective tax burden and force them to either absorb higher costs or bring those services back to domestic providers at potentially higher prices.

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ImpactCertaintyScopeDurationSentiment

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ImpactCertaintyScopeDurationSentiment

State Impacts

StateScoreImpactCertaintyScopeDurationSentiment

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

2 milestones2 actions

Feb 12, 2026House

Referred to the House Committee on Ways and Means.

Feb 12, 2026

Introduced in House

The bill was officially filed and given a number. It now enters the legislative queue.

Votes

No votes have been recorded for this legislation yet.

News

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Source Information

Document Type

Congressional Bill

Official Title

To amend the Internal Revenue Code of 1986 to deny deduction for outsourcing payments.

Bill NumberHR 7559

Congress119th Congress

ChamberHouse of Representatives

Latest ActionReferred to the House Committee on Ways and Means.

Data Sources

Congress.gov

Official legislative information

Read Full Bill Text

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Analysis generated by AI. Always verify with official sources.