In January 2025, a leaked memo from the U.S. House Budget Committee sparked claims (archived) online that House Speaker Mike Johnson and House Republicans had proposed “Trump tax cuts” that would increase taxes for single parents, people on college scholarships and homeowners.
A popular version of the claim read:
Speaker Mike Johnson and House Republicans have released the proposed Trump Tax Cuts, which include a tax increase on single parents, taxing college scholarships for students, and raising taxes for homeowners.
Snopes readers also emailed to ask us about the claim after it spread across Threads (archived), Facebook (archived), and X (archived).
The claim likely originated on Jan. 17, when Punchbowl News shared a copy of the leaked memo that it reported came from House Budget Committee Republicans. Snopes received a copy of the memo through the Ways & Means Committee Democrats, one of the committees mentioned in the document. The document was named RECONCILIATON OPTIONS_010725, indicating that the suggestions related to President Donald Trump and the Republican Party’s upcoming reconciliation bill — more on that below.
The memo included proposed changes that would likely raise taxes for single parents, scholarship recipients and homeowners. However, whether the specific suggestions named in the claim will appear in legislation remains to be seen. We have reached out to the House Budget Committee about the document and will update this report if they reply.
The Reconciliation Options memo is a 50-page document containing suggestions for savings across 11 committees. The document lists a revenue suggestion, for example: “Eliminate Exclusion of Scholarship and Fellowship Income” and, in most cases, what is expected to be gained, for example “$54 billion in 10-year savings” for the above.
The document elaborates on the “Eliminate Exclusion of Scholarship and Fellowship Income” suggestion, stating:
Qualified scholarships and fellowships are generally excluded from taxable income if used for tuition and related expenses. This option would make all scholarship and fellowship income taxable, increasing revenue by $54 billion over 10 years.
The memo’s definition of scholarship is not restricted to college, and also includes fellowships. Both scholarship and fellowship income are currently broadly tax-free, according to the U.S. Internal Revenue Service. If this memo suggestion became law, scholarship or fellowship recipients would be taxed on any income, regardless of where it came from, minus any applicable deductions.
As for taxation of single parents, one memo suggestion reads: “Eliminate Head of Household Filing Status.” Head of Household is a tax filing status that usually gets the filer a lower tax rate (percentage to pay) if they for example pay more than half the cost of keeping up a home. Should this memo suggestion become law, people currently filing taxes under the Head of Household status — often single parents — would likely face higher tax rates than before.
Claims also said that the proposed changes would raise taxes for homeowners. One such suggestion in the memo read: “Eliminate the Home Mortgage Interest Deduction.” This deduction currently allows homeowners to deduct interest they pay on a loan secured by their home from their taxable income. Taxpayers can currently deduct up to $1 million per filing. Another suggestion reads “Lower Home Mortgage Interest Deduction Cap to $500k.” Both would affect the amounts homeowners could deduct from their taxable income and thus the rate of tax they would pay.
However, none of these suggestions is set in stone, or, more importantly, in legislation. The “reconciliation” in the leaked memo’s name refers to a legislative process by which lawmakers can propose tax and spending changes to meet the Congressional budget resolution — a blueprint agreed upon by the House and Senate that covers overall spending and revenue targets. The Trump administration is currently working toward a reconciliation bill to finance key Trump issues like border security, energy, and extending the Tax Cuts and Jobs Act from its first term. This act overhauled tax practices for businesses, with measures due to expire in 2025.
The exact shape of a Republican reconciliation bill and which suggestions from the leaked memo it might include remain to be seen. For now, the memo offers an insight into options considered by the Republican Party in the early stages of drafting legislation on key issues.
@DisavowTrump20. “🚨NEW: Speaker Mike Johnson and House Republicans Have Released the Proposed Trump Tax Cuts, Which Include a Tax Increase on Single Parents, Taxing College Scholarships for Students, and Raising Taxes for Homeowners.” X, 20 Jan. 2025, https://x.com/DisavowTrump20/status/1881160970997043609.
Frequently Asked Questions (FAQs) | Congressional Budget Office. https://www.cbo.gov/faqs#budgetresolution:~:text=A%20budget%20resolution%20is,both%20Houses%20of%20Congress. Accessed 22 Jan. 2025.
“House Budget Floats Menu of Reconciliation Options.” Punchbowl News, https://punchbowl.news/article/finance/economy/house-budget-floats-menu-reconciliation-options/. Accessed 22 Jan. 2025.
Mychael Schnell, Emily Brooks. “Scalise Says GOP Leadership, Trump Agree to Move on One Reconciliation Bill.” The Hill, 21 Jan. 2025, https://thehill.com/homenews/house/5099197-trump-agenda-republican-united/.
@papiklasicmj. “Speaker Mike Johnson and House Republicans Have Released the Proposed Trump Tax Cuts, Which Include a Tax Increase on Single Parents, Taxing College Scholarships for Students, and Raising Taxes for Homeowners.” Threads, 20 Jan. 2025, https://www.threads.net/@papiklasicmj/post/DFDkQsrTC5Z.
Publication 501 (2024), Dependents, Standard Deduction, and Filing Information | Internal Revenue Service. https://www.irs.gov/publications/p501. Accessed 22 Jan. 2025.
Publication 936 (2024), Home Mortgage Interest Deduction | Internal Revenue Service. https://www.irs.gov/publications/p936. Accessed 22 Jan. 2025.
“reconciliation_WM.” Punchbowl News, https://punchbowl.news/reconciliation_wm/. Accessed 22 Jan. 2025.
@sciresSoehl. “Trump Tax Cuts, Which Include a Tax Increase on Single Parents, Taxing College Scholarships for Students, and Raising Taxes for Homeowners.” X, 21 Jan. 2025, https://x.com/sciresSoehl/status/1881708147943121388.
Tax Cuts and Jobs Act: A Comparison for Businesses | Internal Revenue Service. https://www.irs.gov/newsroom/tax-cuts-and-jobs-act-a-comparison-for-businesses. Accessed 22 Jan. 2025.
Tooley, Joel. “With Only 49.8% of the Votes Cast for President Went to Their Candidate, Speaker Mike Johnson and House Republicans Have Released the Proposed Trump Tax Cuts, Which Include a Tax Increase on Single Parents, Taxing College Scholarships for Students, and Raising Taxes for Homeowners.” Facebook, 22 Jan. 2025, https://www.facebook.com/joel.tooley/posts/pfbid02ngAttUuMavzVH6dJGPSya9sezQ2TEeHtV4bo8X5ajNHG6kscCDJBDnh95vffotkNl.
Topic No. 421, Scholarships, Fellowship Grants, and Other Grants | Internal Revenue Service. https://www.irs.gov/taxtopics/tc421. Accessed 22 Jan. 2025.
Trump, Donald J. “Members of Congress Are Getting to Work on One Powerful Bill That Will Bring Our Country Back, and Make It Greater than Ever Before.” Truth Social, 6 Jan. 2025, https://truthsocial.com/@realDonaldTrump/113778957475969583.
Laerke Christensen is a journalist based in London, England, with expertise in OSINT reporting.
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