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To amend the Internal Revenue Code of 1986 to establish a deduction for certain overtime payments.
Summary
This bill creates a federal income tax deduction for overtime compensation, allowing individuals to deduct up to $10,000 of overtime pay per year ($20,000 for joint returns). The deduction applies to compensation paid at least 1.5 times the regular rate for work hours exceeding those required under the Fair Labor Standards Act (40 hours per week) or a collective bargaining agreement. The deduction phases out by $50 for each $1,000 of modified adjusted gross income exceeding $100,000 ($200,000 for joint returns). The deduction is available to all taxpayers, not just itemizers, and is not subject to limitations that apply to other itemized deductions. Employers must report overtime compensation on W-2 forms, and the IRS must adjust withholding tables to reflect the deduction, effective for tax years beginning after December 31, 2025.
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)
- Sen. Marshall, Roger [R-KS] (R-KS)
3 cosponsors
- Sen. Justice, James C. [R-WV] (R-WV)
- Sen. Ricketts, Pete [R-NE] (R-NE)
- Sen. Tuberville, Tommy [R-AL] (R-AL)
Money behind the sponsor
Top reported contributors to Roger Marshall’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.
- NULL $46,314
- PYRAMID SOUND $19,800
- GROWITZ EQUITY $13,200
- SPECCHEM $13,200
- ONYX EQUITY PARTNERS $13,200
Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for Roger Marshall → · Outside spending →
Actions (2)
- May 6, 2025 Read twice and referred to the Committee on Finance. · senate
- May 6, 2025 Introduced in Senate
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE SENATE OF THE UNITED STATES
May 6, 2025
Mr. Marshall (for himself, Mr. Tuberville, Mr. Ricketts, and Mr. Justice) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to establish a deduction for certain overtime payments.
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 “Overtime Wages Tax Relief Act”.
SEC. 2. DEDUCTION FOR OVERTIME COMPENSATION.
(a) In General.—
(1) Deduction allowed.—Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section:
“SEC. 224. OVERTIME COMPENSATION.
“(a) In General.—There shall be allowed as a deduction an amount equal to so much of any overtime compensation received by an individual as does not exceed $10,000 ($20,000 in the case of a joint return) for the taxable year.
“(b) Limitation.—The amount of the deduction allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds $100,000 ($200,000 in the case of a joint return). For purposes of the preceding sentence, the term ‘modified adjusted gross income’ means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933.
“(c) Overtime Compensation.—For purposes of this section, the term ‘overtime compensation’ means compensation that is paid to a taxpayer—
“(1) at a rate of not less than one and one-half times the regular rate at which the taxpayer is employed, and
“(2) for work for a single employer that is in excess of a maximum number of hours of such work for a specified period of time as required pursuant to—
“(A) section 7 of the Fair Labor Standards Act of 1938, or
“(B) an agreement that—
“(i) is a collective bargaining agreement or an agreement or understanding arrived at between the employer and the employee before performance of the work, and
“(ii) provides that such maximum number of hours for a specified period of time is not less than 40 hours for a 7-day work period.
“(d) Regulations.—The Secretary shall provide such regulations or other guidance as may be necessary to carry out this section.”.
(2) Conforming amendment.—The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as relating to section 225 and by inserting after the item relating to section 223 the following new item:
“Sec. 224. Overtime payments.”.
(b) Deduction Allowed to Non-Itemizers.—Section 63(b) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting “and”, and by adding at the end the following new paragraph:
“(5) the deduction provided in section 224.”.
(c) Non-Application of Certain Limitations for Itemizers.—
(1) Deduction not treated as a miscellaneous itemized deduction.—Section 67(b) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting “, and”, and by adding at the end the following new paragraph:
“(13) the deduction under section 224 (relating to overtime compensation).”.
(2) Deduction not taken into account under overall limitation.—Section 68(c) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting “, and”, and by adding at the end the following new paragraph:
“(4) the deduction under section 224 (relating to overtime compensation).”.
(d) Reporting.—Section 6051(a) of the Internal Revenue Code of 1986 is amended by striking “and” at the end of paragraph (16), by striking the period at the end of paragraph (17) and inserting “, and”, and by inserting after paragraph (17) the following new paragraph:
“(18) the total amount of overtime compensation as defined in section 224(b).”.
(e) Withholding.—The Secretary of the Treasury (or the Secretary’s delegate) shall modify the tables and procedures prescribed under section 3402(a) of the Internal Revenue Code of 1986 to take into account the deduction allowed under section 224 of such Code (as added by this Act).
(f) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2025. <all>
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