(a) In general.—Section 127(c)(1)(B) is amended by striking “in the case of payments made before January 1, 2026,”.
(b) Inflation adjustment.—Section 127 is amended—
(1) by redesignating subsection (d) as subsection (e), and
(2) by inserting after subsection (c) the following new subsection:
“(d) Inflation adjustment.—
“(1) IN GENERAL.—In the case of any taxable year beginning after 2026, both of the $5,250 amounts in subsection (a)(2) shall each be increased by an amount equal to—
“(A) such dollar amount, multiplied by
“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.
“(2) ROUNDING.—If any increase under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.”.
(c) Effective date.—The amendment made by this section shall apply to payments made after December 31, 2025.