Read twice and referred to the Committee on Finance.
The bill creates a new federal tax deduction for qualifying overtime compensation: up to $10,000 for single filers and $20,000 for joint filers per tax year, phased out above $100,000/$200,000 modified adjusted gross income. "Overtime compensation" is defined as pay at least 1.5 times the regular rate for hours worked in excess of limits established by the FLSA or a qualifying pre-work agreement. The measure requires employer reporting of total overtime compensation and directs Treasury to update withholding rules; it applies to tax years beginning after December 31, 2025.
Liberals prefer refundable credits; conservatives accept deductions.
Relative to its intended legislative type, this bill is a straightforward substantive tax change that is well-specified in its core mechanics and integrated with relevant sections of the Internal Revenue Code, with appropriate administrative triggers for regulations, reporting, and withholding.
The bill creates a new federal tax deduction for qualifying overtime compensation: up to $10,000 for single filers and $20,000 for joint filers per tax year, phased out above $100,000/$200,000 modified adjusted gross income. "Overtime compensation" is defined as pay at least 1.5 times the regular rate for hours worked in excess of limits established by the FLSA or a qualifying pre-work agreement.
The measure requires employer reporting of total overtime compensation and directs Treasury to update withholding rules; it applies to tax years beginning after December 31, 2025.
Moderately attractive narrow tax cut with administrative clarity, but fiscal impact and tougher Senate processes lower overall odds.
Relative to its intended legislative type, this bill is a straightforward substantive tax change that is well-specified in its core mechanics and integrated with relevant sections of the Internal Revenue Code, with appropriate administrative triggers for regulations, reporting, and withholding.
Liberals prefer refundable credits; conservatives accept deductions.
These are examples from the analysis, not a ranked list of the most-affected groups.
Liberals prefer refundable credits; conservatives accept deductions.
Generally receptive to direct pay increases for workers but cautious about structure.
Supports helping overtime workers, yet prefers targeted refundable credits or higher minimum wages to benefit lower-income workers.
Sees risks to revenue and potential unequal benefits across income levels; some impacts are speculative without CBO scoring.
Views bill as a modest, targeted worker tax relief measure that merits consideration if fiscally responsible.
Likes phaseout thresholds and reporting, but wants cost estimates and anti-abuse rules.
Would weigh net budget impact and implementation complexity before full support.
Generally favorable as a tax reduction for workers and incentive for paid overtime.
Sees it as pro-work, market-oriented relief that rewards labor; some concern remains about added reporting and the bill’s fiscal impact if offsets are not specified.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Moderately attractive narrow tax cut with administrative clarity, but fiscal impact and tougher Senate processes lower overall odds.
The bill has not accumulated any surfaced votes yet.
Liberals prefer refundable credits; conservatives accept deductions.
Moderately attractive narrow tax cut with administrative clarity, but fiscal impact and tougher Senate processes lower overall odds.
Relative to its intended legislative type, this bill is a straightforward substantive tax change that is well-specified in its core mechanics and integrated with relevant sections of the Internal Revenue Code, with appr…
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