The $40,000 cap would begin in 2025, with the same $500,000 income phaseout, and both figures would rise by 1% annually from 2026 through 2033.

The legislation, centered around extending the expiring 2017 personal tax cuts, also included a suite of Republican priorities and drew unified Democratic opposition.

Republican Senator Joni Ernst has introduced an amendment to the U.S. Senate's tax and spending megabill that would change two of the most contentious parts of that bill and could give a small boost to wind and solar projects that had been targeted in the draft being debated on the Senate floor.