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Overtime Pay Tax Relief: Lower Taxes for Workers

This new law introduces a tax deduction for a portion of overtime pay, potentially leading to lower taxes for many workers. The change applies to individuals whose income is below certain limits, and the deduction will be available until the end of 2029. This means people working overtime could keep more of their earnings.
Key points
Allows a deduction of up to 20% of overtime compensation from taxable income.
Deduction available for individuals earning below $200,000 (married filing jointly), $150,000 (head of household), or $100,000 (other individuals).
Provisions apply to amounts received after the enactment date and are effective until December 31, 2029.
Changes will affect tax withholding procedures, potentially resulting in higher net paychecks.
article Official text account_balance Process page
Introduced
Citizen Poll
No votes cast
Additional Information
Print number: 119_HR_561
Sponsor: Rep. Bacon, Don [R-NE-2]
Process start date: 2025-01-20
Lustra uses Artificial Intelligence. Verify details in source documents.
Summarized by: gemini-2.5-flash
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Overtime Pay Tax Relief Act of 2025

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_561.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-01-20.

What are the main provisions?

Key points include:

  • Allows a deduction of up to 20% of overtime compensation from taxable income.
  • Deduction available for individuals earning below $200,000 (married filing jointly), $150,000 (head of household), or $100,000 (other individuals).
  • Provisions apply to amounts received after the enactment date and are effective until December 31, 2029.
  • Changes will affect tax withholding procedures, potentially resulting in higher net paychecks.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Bacon, Don [R-NE-2].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-23.

CATEGORIES

Taxes Labor