What does Preamble of OPTIONS Act do?

This bill proposes to amend the Internal Revenue Code of 1986. The proposed amendment would allow employers to offer employees a choice among tax-favored employer contributions.

What does SHORT TITLE. of OPTIONS Act do?

This bill is formally titled the "Optimizing Participant Tax Incentives through Optional Noncash Selections Act" or the "OPTIONS Act".

What does EXCLUSION OF CERTAIN EMPLOYER-PROVIDED BENEFITS UNDER A of OPTIONS Act do?

This section amends the Internal Revenue Code of 1986 to establish a new section, 125A, defining 'Qualified Benefit Options Plans'. Under these plans, participants generally will not have amounts included in their gross income solely because they can choose among the plan's benefits. A 'qualified benefit options plan' is a written plan offered by an employer where participants can allocate employer contributions among 'qualified benefits' and cannot elect cash or other taxable benefits instead. Qualified benefits include contributions excluded from gross income under sections 402, 403, 105, 106, and 127, as well as other benefits excluded under the chapter. Certain rules similar to those in section 125 apply to highly compensated participants and key employees. For purposes of applying nondiscrimination rules, employer contributions made available to participants are treated as contributions made to the plan, regardless of whether the participant elects to contribute. The amendments apply to taxable years beginning after December 31, 2025. The section also amends reporting and recordkeeping requirements under section 6039D to include qualified benefit options plans.

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OPTIONS Act

Last updated: 4/15/2026 · Introduced: 4/15/2026

Author: W. Steube (R-FL)

TL;DR (AI)

This bill allows employers to offer employees a choice among tax-advantaged benefits, such as retirement or health savings accounts, funded by employer contributions.
It establishes 'Qualified Benefit Options Plans' which permit participants to allocate employer contributions among specified tax-excluded benefits without those allocations being considered taxable income.
Employers offering these plans will be subject to new reporting and recordkeeping requirements, and the changes apply to taxable years beginning after December 31, 2025.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 1 more.

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