Summary

Excludes from gross income interest paid by the government on tax overpayments (the interest the IRS pays on refunds) for individual taxpayers and certain eligible small businesses. One provision only establishes a short title and does not change law or authorize spending. The change is effective for taxable years beginning after the date of enactment.

• Excludes interest on tax overpayments from gross income for individuals and eligible small businesses.
• Adds a new Internal Revenue Code section to the part of the Code that lists income exclusions.
• Includes a short-title provision that does not change law or authorize spending.
• Effective for taxable years beginning after the date of enactment (forward-looking).
• Likely reduces paperwork for taxpayers by removing the need to include this interest in gross income.
• May require IRS updates to forms, instructions, and reporting processes.
• Could produce a modest reduction in federal revenue relative to current law.
• Applies only to interest on tax overpayments under the existing statutory interest provision.