Contact Congress about S. 2017: S Corporation Modernization Act of 2025
This bill modernizes S corporation tax rules by creating deductions for inherited stock, letting foreign individuals and retirement accounts become shareholders, and raising limits on investment income. It also repeals complex deferred compensation rules and makes it easier for companies with many employee-owners to keep their S corp status.
Modern Action explains legislation in plain English, helps you choose whether to support, oppose, or ask for changes, and drafts a message tied to the bill, your stance, and the elected officials who can act on it.
S Corporation Modernization Act of 2025 is a Senate bill in committee. The latest recorded action: Read twice and referred to the Committee on Finance.
Latest action on S. 2017: Read twice and referred to the Committee on Finance.
Who this affects: This bill affects a wide range of people connected to S corporations, from the business owners themselves to their families, employees, foreign investors, and retirement savers. It also changes how employers design executive pay packages.
Why this matters: S corporations are one of the most common business structures in America, used by millions of small and mid-size companies. Changes to their tax rules ripple out to business owners, their families, employees, investors, and the federal budget. This bill makes it significantly easier to pass businesses down through generations, attract new kinds of investors, and earn investment income, but these benefits come with real trade-offs in tax revenue and regulatory complexity.
Key provisions in S. 2017
- Creates a new tax code section allowing heirs to claim a 15-year amortization deduction for built-in gains in inherited S corporation stock, with faster deductions if the company sells the assets sooner
- If someone used this new deduction and later sells the stock or certain assets, some of the gain must be reclassified and taxed as ordinary income instead of capital gains
- Raises the allowable ratio of passive investment income from 25% to 60% of total receipts and removes the rule that could automatically end a company's S corporation status for earning too much investment income
- Updates what counts as passive investment income, adding exceptions for interest tied to inventory sales, lending and finance businesses, dividends from related C corporations, and interest or dividends earned by banks and certain holding companies
- Allows foreign individuals who are not U.S. residents to be S corporation shareholders for the first time, and creates rules treating part of their gain or loss from selling the stock as U.S. business income
How Modern Action helps you take action on S. 2017
You do not have to start with a blank letter. Modern Action turns the bill, your position, and the relevant congressional context into a message you can edit and send. The goal is to make contacting Congress clear, specific, and useful without forcing you to parse bill text or figure out the right office on your own.
Questions people ask about S. 2017
- What is S. 2017?
- This bill modernizes S corporation tax rules by creating deductions for inherited stock, letting foreign individuals and retirement accounts become shareholders, and raising limits on investment income. It also repeals complex deferred compensation rules and makes it easier for companies with many employee-owners to keep their S corp status.
- How do I support or oppose S. 2017?
- Choose support, oppose, or ask for changes on Modern Action. The action flow drafts the message for you and keeps the wording tied to this bill.
- Who should I contact about S. 2017?
- Modern Action uses your location to route the action to the congressional offices relevant to the bill and your representation.
- Can Modern Action explain S. 2017 before I act?
- Yes. Modern Action gives you a plain-English summary, current status, and action context before you send anything.
