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No Tax on Overtime for All Workers Act
To amend the Internal Revenue Code of 1986 to allow a deduction for certain overtime compensation.
Summary
This bill allows workers to deduct certain overtime compensation from their taxable income. The deduction applies to overtime pay required under the Fair Labor Standards Act, as well as to compensation paid at a rate of at least one-and-a-half times the regular rate for hours worked beyond a standard work period (at least 40 hours per week) under a collective bargaining agreement or employer-employee contract. The change would take effect for tax years beginning after December 31, 2024.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
1 cosponsor
Actions (2)
- Jul 23, 2025 Referred to the House Committee on Ways and Means. · house
- Jul 23, 2025 Introduced in House
Similar bills (6)
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Text versions (1)
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Full text
IN THE HOUSE OF REPRESENTATIVES
July 23, 2025
Mrs. Sykes introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a deduction for certain overtime compensation.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “No Tax on Overtime for All Workers Act”.
SEC. 2. DEDUCTION FOR CERTAIN OVERTIME COMPENSATION.
(a) In General.—Section 225(c)(1) of the Internal Revenue Code of 1986 is amended to read as follows:
“(1) In general.—For purposes of this section, the term ‘qualified overtime compensation’ means—
“(A) any overtime compensation paid to an individual required under section 7 of the Fair Labor Standards Act of 1938 that is in excess of the regular rate (as used in such section) at which such individual is employed, or
“(B) any compensation paid to an individual that is in excess of the regular rate at which such individual is employed if such compensation is paid—
“(i) at a rate of not less than one and one-half times such regular rate,
“(ii) for work for a single employer that is in excess of a standard number of hours of such work for a specified period of time, and
“(iii) as required by a collective bargaining agreement, or an agreement between such employer and employee, which—
“(I) was entered into before the performance of the work, and
“(II) specifies that such standard number of hours for a specified period of time is not less than 40 hours for a 7-day work period.”.
(b) Effective Date.—The amendment made by this section shall apply to taxable years beginning after December 31, 2024. <all>
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