Overtime Pay Tax Relief Act of 2025

# Overtime Pay Tax Relief Act of 2025 - Summary **What the Bill Would Do:** This bill would allow workers to deduct a portion of their overtime pay from their federal income taxes, effectively reducing their taxable income. The deduction would be limited to 20% of a worker's regular wages from the same employer and would only be available through 2029. For example, if someone earned $500 in overtime, they could potentially deduct up to $100 (20% of their regular wages), lowering the amount of income subject to federal tax. **Who It Affects and Key Limitations:** The tax break would primarily benefit working-class and middle-class employees who work overtime.

However, eligibility has income caps: individuals earning over $100,000 annually would not qualify (the threshold is higher for heads of household at $150,000 and married couples filing jointly at $200,000). This means higher-earning workers would be excluded from the benefit, even if they work overtime. **Current Status:** The bill was introduced by Representative Don Bacon (R-Nebraska) in the 119th Congress and is currently in committee, meaning it has not yet been debated or voted on by the full House of Representatives.