Bill · S. 1606· Senate(119-S-1606)
Overtime Wages Tax Relief Act
- Introduced
- 5/6/2025
- Last activity
- 5/6/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Roger Marshall
- Cosponsors
- - 3 - 0
- Introduced
- In Committee
What this bill would do
The "Overtime Wages Tax Relief Act" amends the Internal Revenue Code of 1986 to create a tax deduction for certain overtime payments. Individuals can deduct up to $10,000, or $20,000 for joint returns, of overtime compensation. This deduction is available to both those who itemize and those who do not. The benefit is reduced for taxpayers whose modified adjusted gross income exceeds $100,000 for individuals or $200,000 for joint returns. It applies to compensation paid at least one and one-half times the regular rate for work exceeding a specified maximum number of hours. These changes would take effect for taxable years beginning after December 31, 2025.
Yes· 3 of 10
Would households on low incomes be better off under this?+8
Provides significant tax relief to those whose income is heavily dependent on overtime hours.
Does this cut taxes for middle-income families?+7
Provides a tax deduction of up to $10,000 for overtime pay for individuals earning up to $100,000.
Would middle-income households be better off under this?+6
Directly benefits middle-class hourly workers through a tax deduction.
The opposite· 3 of 6
Would people with substantial wealth be better off under this?-5
Excluded from the benefit due to income caps.
Would the very wealthiest people be better off under this?-5
Excluded from the benefit due to income caps.
Would billionaires be better off under this?-5
Excluded from the benefit due to income caps.
Who it would affect, and how
Potential Positive Impacts for People
-
Tax Savings for Overtime Workers: Individuals can receive a deduction for overtime compensation up to $10,000, or $20,000 for joint returns, which reduces taxable income (Section 2, Sec. 224(a)).
-
Accessibility for All Taxpayers: The deduction is allowed for non-itemizers, meaning people do not have to itemize their deductions to benefit from this provision (Section 2(b)).
-
Protection from Certain Limitations: The deduction is not treated as a miscellaneous itemized deduction and is not subject to the overall limitation for those who do itemize (Section 2(c)).
Potential Negative Impacts for People
- Income Limitations: The deduction amount is reduced by $50 for every $1,000 (or fraction thereof) that a taxpayer's modified adjusted gross income exceeds $100,000 for individuals or $200,000 for joint returns (Section 2, Sec. 224(b)).
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+6Good For Union Workers+6Good For Middle Aged+3Good For Young Adults+3Good For African Americans+2Good For Hispanic Americans+2Good For Billionaires-5Good For High Net Worth Individuals-5Good For Ultra High Net Worth Individuals-5Good For High Income Households-2
- Economy And Finance
- Reduces Middle Class Taxes+7Improves Economic Growth+2Reduces National Debt-3Improves Fiscal Responsibility-2
- Social Issues And Justice
- Improves Poverty Reduction+4
- 5/6/2025
- Read twice and referred to the Committee on Finance.
- 3 Cosponsors added.
- Introduced in Senate
James JusticeRepublican · West Virginia
Pete RickettsRepublican · Nebraska
Tommy TubervilleRepublican · Alabama