S. 1046 · Where this bill is now
In committee
Introduced in the Senate, Mar 13, 2025
What this bill does
In plain words · AI-written from the official summaryExcludes overtime pay from federal income tax
Right now, when you earn overtime pay for working more than 40 hours a week, that extra money counts toward your federal income taxes. This bill would change that by saying overtime compensation wouldn't count as income for federal tax purposes. Essentially, the overtime hours you work wouldn't be taxed the same way your regular pay is.
How it affects you
If this becomes law, workers who regularly earn overtime would pay less in federal income taxes. This would affect hourly employees and anyone else who gets paid overtime under federal labor rules—they'd keep more of their overtime earnings. Salaried workers and others who don't receive overtime pay wouldn't see a direct change.
Read the official summary (Introduced in Senate, Mar 13, 2025)
No Tax On Overtime Act of 2025
This bill excludes from gross income for federal income tax purposes overtime compensation paid for hours worked in excess of 40 hours per week (as required by the Fair Labor Standards Act of 1938). Under current law, overtime compensation paid to a taxpayer is included in gross income for purposes of calculating federal income taxes.
Written by AI (Claude) using only the official summary by the Congressional Research Service, the Library of Congress’s nonpartisan research staff. It can miss nuance, so check the official summary and the bill text for details.
1st SessionS. 1046
A BILL
No Tax On Overtime Act of 2025
Sponsor: Sen. Josh Hawley (R-MO) · Introduced Mar 13, 2025 · Taxation · 1 version of the text
Sources: Congress.gov actions and votes · bill text from GovInfo · latest official action Mar 13, 2025: “Read twice and referred to the Committee on Finance.”