Keep Every Extra Penny Act of 2025
Sponsored By: Representative Fulcher
Introduced
Summary
Excludes overtime compensation required under section 7 of the Fair Labor Standards Act from federal gross income. This change would make mandated overtime pay tax-free for workers who receive it.
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- Workers: People who earn overtime would not count that overtime as gross income, which lowers their taxable income and increases after-tax pay.
- Households: Families with overtime earners would see less federal income tax on overtime earnings, boosting take-home household income.
- Tax code: The bill adds a new Section 139J to the Internal Revenue Code and applies the exclusion to amounts received after enactment.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
Lower taxes on overtime pay
This bill would let you exclude certain overtime pay from your federal taxable income. It would apply only to overtime pay that the Fair Labor Standards Act requires. It would cover amounts you receive after the bill becomes law. This could lower your federal income tax bill. Your savings could roughly equal your qualifying overtime pay times your tax rate.
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Sponsors & CoSponsors
Sponsor
Fulcher
ID • R
Cosponsors
Rep. Rulli, Michael A. [R-OH-6]
OH • R
Sponsored 1/15/2025
Roll Call Votes
No roll call votes available for this bill.
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