No Tax on Overtime for All Workers Act
Summary
What This Bill Does
The No Tax on Overtime for All Workers Act broadens the tax-code definition of qualified overtime compensation. Section 225 would cover overtime compensation required under section 7 of the Fair Labor Standards Act to the extent the pay exceeds the worker's regular rate. It would also cover compensation above the regular rate paid under a pre-work agreement between an employee or labor organization and employer when the work exceeds a standard number of hours, so long as the standard is not less than 40 hours in a seven-day work period. For Railway Labor Act employees, including crewmembers, flight crewmembers, and rail operating craft employees, the agreement can key eligibility to scheduled or anticipated duty hours or maximum duty-hour thresholds. The change applies to taxable years beginning after December 31, 2024.
Who Benefits and How
Hourly workers receiving FLSA overtime benefit because more overtime premium pay can qualify for the federal deduction. Unionized workers with negotiated overtime agreements benefit because qualifying above-regular-rate pay is included when the agreement meets the statutory hour tests. Airline crew members benefit because Railway Labor Act duty-hour overtime arrangements can qualify. Rail operating craft employees benefit because scheduled or maximum duty-hour arrangements can qualify for the deduction.
Who Bears the Burden and How
Internal Revenue Service examiners must administer a broader definition of qualified overtime compensation. Payroll departments must identify regular-rate pay, above-regular-rate overtime, qualifying agreements, and applicable taxable years. Employers with negotiated overtime arrangements must document pre-work agreements and hour thresholds. Federal taxpayers bear the revenue cost of expanding the overtime deduction.
Key Provisions
- Expands qualified overtime compensation for the section 225 deduction.
- Adds FLSA overtime premiums above the worker's regular rate.
- Adds negotiated compensation above regular rates when work exceeds qualifying hour thresholds.
- Covers Railway Labor Act crew and rail operating craft duty-hour arrangements.
- Applies to taxable years beginning after December 31, 2024.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
Expands the Internal Revenue Code deduction for qualified overtime compensation so it covers Fair Labor Standards Act overtime premiums and negotiated overtime-like compensation above regular rates, including Railway Labor Act crew and rail operating craft arrangements, for taxable years beginning after December 31, 2024.
Key Policy Areas
Tax, Labor, Wages
Primary Purpose
Expands the Internal Revenue Code deduction for qualified overtime compensation so it covers Fair Labor Standards Act overtime premiums and negotiated overtime-like compensation above regular rates, including Railway Labor Act crew and rail operating craft arrangements, for taxable years beginning after December 31, 2024.
Policy Domains
Resolution provisions
Identified Gains
- Hourly workers receiving FLSA overtime
- Unionized workers
- Airline crew members
- Rail operating craft employees
Identified Costs
- Internal Revenue Service examiners
- Payroll departments
- Employers with negotiated overtime arrangements
- Federal taxpayers
Sponsors
Legislative Progress
In CommitteeMs. Malliotakis (for herself, Mrs. Sykes, Mr. LaLota, Mr. Suozzi, …
Referred to the House Committee on Ways and Means.
Introduced in House
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Hourly workers receiving FLSA overtime, Unionized workers
Airline crew members, Rail operating craft employees
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology