PRIA Logo™
119-s-1606119th CongressWALLET

Overtime Wages Tax Relief Act

Sponsored By: Senator Marshall, Roger [R-KS]

Introduced

Summary

Creates a new tax deduction for overtime pay. This bill would let many workers deduct a portion of their overtime earnings from taxable income and adds new reporting and withholding rules to implement the change.

Show full summary
  • Workers and households: Workers who earn overtime could deduct up to $10,000 of overtime pay on individual returns and $20,000 on joint returns. Overtime is defined as pay at least one and one-half times the regular rate for hours beyond limits set by the Fair Labor Standards Act or by qualifying agreements.
  • Income limits: The deduction phases down for higher earners, starting at $100,000 of modified adjusted gross income for single filers and $200,000 for joint filers.
  • Employers and tax administration: Employers must report total overtime pay on wage statements and the IRS must update withholding tables and procedures. The deduction would apply to tax years beginning after December 31, 2025.

Personalized for You

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 0 costs, 1 mixed.

Lower taxes on overtime pay

If enacted, you would be able to deduct up to $10,000 of overtime pay on your tax return. If married filing jointly, the cap would be $20,000. The deduction would be cut by $50 for each $1,000 (or fraction) your modified adjusted gross income is over $100,000 ($200,000 joint). "Overtime pay" would mean pay at least 1.5 times your regular rate for hours over the FLSA limit or a qualifying agreement. The deduction would be above-the-line and available to people who take the standard deduction. These rules would start for tax years after December 31, 2025.

New overtime reporting and withholding

If enacted, employers would have to report total overtime pay on wage forms. The Treasury would update withholding tables and procedures to reflect the new overtime deduction. The Secretary would issue rules and guidance employers must follow. Employers may need to update payroll systems and records. You may see changes in take-home pay after withholding changes. These rules would apply for tax years after December 31, 2025.

Sponsors & CoSponsors

Sponsor

Marshall, Roger [R-KS]

KS • R

Cosponsors

  • Sen. Tuberville, Tommy [R-AL]

    AL • R

    Sponsored 5/6/2025

  • Sen. Ricketts, Pete [R-NE]

    NE • R

    Sponsored 5/6/2025

  • Sen. Justice, James C. [R-WV]

    WV • R

    Sponsored 5/6/2025

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
Back to Legislation