Bill · H.R. 3118· House(119-HR-3118)
No Tax on Overtime Act
- Introduced
- 4/30/2025
- Last activity
- 4/30/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Nathaniel Moran
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
The "No Tax on Overtime Act" amends the Internal Revenue Code of 1986 to allow a tax deduction for qualified overtime compensation. This deduction is limited to compensation for up to 300 hours of service per year. The benefit is subject to a phaseout based on the taxpayer's modified adjusted gross income. It is available to both itemizers and non-itemizers. To claim the deduction, a social security number is required.
Yes· 3 of 18
Would households on low incomes be better off under this?+8
Directly benefits those who rely on overtime to increase their base income.
Would middle-income households be better off under this?+7
Provides significant tax relief for middle-class workers within the income phaseout limits.
Does this cut taxes for middle-income families?+6
Provides a tax deduction for overtime pay for individuals earning up to $100,000 and couples up to $200,000.
The opposite· 3 of 6
Does this reduce what the federal government owes?-3
Reducing taxable income through a new deduction typically decreases federal tax revenue.
Would high-income households be better off under this?-2
Higher earners are phased out of the deduction entirely.
Would people with substantial wealth be better off under this?-2
They exceed the income limits for this tax benefit.
Who it would affect, and how
Potential Positive Impacts for People
-
Tax Savings on Overtime: Individuals can receive a deduction equal to their qualified overtime compensation, which reduces their taxable income (Sec. 2(a)).
-
Accessibility for All Filers: The deduction is available to non-itemizers, meaning people do not have to itemize their deductions to benefit from this provision (Sec. 2(b)).
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Spousal Benefits: For those filing joint returns, the 300-hour limit is applied separately to each spouse, potentially allowing more overtime compensation to be deducted per household (Sec. 2(b)(2)).
Potential Negative Impacts for People
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Hour Limitations: The deduction is capped and cannot exceed the compensation related to more than 300 hours of service in a taxable year (Sec. 2(b)(1)).
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Income Restrictions: People earning over $100,000 (or $200,000 for joint returns) will see their deduction reduced by $100 for every $1,000 they earn above those limits (Sec. 2(b)(3)).
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Strict Documentation Requirements: No deduction is allowed if the taxpayer fails to include the social security number of the individual to whom the compensation was paid (Sec. 2(d)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Low Income Households+8Good For Middle Class Households+7Good For Union Workers+5Good For Middle Aged+4Good For Young Adults+4Good For African Americans+3Good For Hispanic Americans+3Good For Men+3Good For Native Americans+3Good For Students+3Good For Women+3Good For Asian Americans+2Good For Rural Residents+2Good For Urban Residents+2Good For White Americans+2Good For Billionaires-2Good For High Income Households-2Good For High Net Worth Individuals-2Good For Ultra High Net Worth Individuals-2
- Economy And Finance
- Reduces Middle Class Taxes+6Improves Economic Growth+2Reduces National Debt-3Improves Fiscal Responsibility-2
- Social Issues And Justice
- Improves Poverty Reduction+3
- 4/30/2025
- Referred to the House Committee on Ways and Means.
- Introduced in House