Workers get tax break on overtime pay — first time in decades
H.R. 5475 — No Tax on Overtime for All Workers Act · Filed by Nicole Malliotakis (R-NY) · 54 cosponsors · Introduced Sep 18, 2025 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill allows workers to deduct overtime compensation from their federal taxable income. Under current law, wages are fully taxable; this bill carves out overtime pay (hours beyond 40 per week, or beyond agreed-upon thresholds for rail and airline workers) as a deduction, reducing the income tax owed by workers who earn overtime.
Why we flagged it
The bill's sole operative mechanism is a tax deduction for overtime wages earned by workers. It is a straightforward tax relief measure targeting wage-earners, not a regulatory change or appropriation.
What the text implies
- The deduction applies retroactively to taxable years beginning after December 31, 2024, meaning workers filing 2025 returns could claim it immediately if enacted.
- The bill covers both FLSA-mandated overtime (federal minimum) and contractually agreed overtime, potentially broadening the benefit beyond statutory minimums.
The full analysis lists 4 implications of this text.
Who stands to gain
wage-earning workers (all industries subject to overtime rules)