No Tax on Overtime for All Workers Act
Sponsored By: Senator Justice, James C. [R-WV]
Introduced
Summary
Creates a tax deduction for certain overtime pay. This bill would define "qualified overtime compensation" so overtime that meets Fair Labor Standards Act rules or Railway Labor Act arrangements could qualify for a tax deduction under the Internal Revenue Code.
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- Workers: Employees who receive overtime required by the Fair Labor Standards Act would have that excess pay defined as eligible for a tax deduction, which could lower taxable income for overtime hours.
- Union and rail employees: Overtime paid under a pre-arranged agreement and work beyond scheduled or anticipated hours for workers covered by the Railway Labor Act is specifically included as qualifying compensation.
- Timing for taxpayers: The change would apply to taxable years beginning after Dec. 31, 2024.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
Lower taxes on overtime pay
If enacted, you would be able to deduct certain overtime pay from your taxable income. It would cover overtime required by the Fair Labor Standards Act that pays more than your regular rate. It would also cover pay above your regular rate under a written agreement made before the work. Under that agreement, the standard work period must be at least 40 hours per 7-day week. For Railway Labor Act crews, it would cover pay for hours beyond scheduled duty or over an agreed maximum for a set period. This would include crewmembers, flight crewmembers, and rail operating craft employees. The rule would apply for 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.
View on Congress.gov