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119-s-4310119th CongressWALLET

No Tax on Overtime for All Workers Act

Sponsored By: Senator Justice, James C. [R-WV]

Introduced

Summary

Creates a tax deduction for "qualified overtime compensation." This bill would let workers deduct certain overtime pay when computing taxable income, using a specific definition tied to the Fair Labor Standards Act and to prearranged work agreements.

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  • Workers who earn overtime could deduct overtime pay that exceeds their regular rate, which would lower taxable income from those extra hours.
  • Employees who and employers agree before work is done can qualify when overtime is for hours beyond a standard period, with that standard not less than 40 hours in a 7-day period.
  • Workers covered by the Railway Labor Act can qualify when the pay is for hours beyond scheduled or maximum duty hours set in their agreements.
  • The deduction would apply for tax years beginning after December 31, 2024.

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Bill Overview

Analyzed Economic Effects

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

Lower federal tax on overtime pay

This bill would let you deduct certain overtime pay on your federal income tax return. It would cover overtime required by the Fair Labor Standards Act when pay exceeds your regular rate. It would also cover pay above your regular rate if a written agreement made before the work sets a standard work period. That standard must be at least 40 hours in a 7-day workweek. For railway workers, it would cover pay for hours beyond scheduled or maximum duty hours if the agreement says so. This would apply to tax years beginning after December 31, 2024.

Sponsors & CoSponsors

Sponsor

Justice, James C. [R-WV]

WV • R

Cosponsors

  • Sen. Cantwell, Maria [D-WA]

    WA • D

    Sponsored 5/11/2026

Roll Call Votes

No roll call votes available for this bill.

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