“A bill to amend the Internal Revenue Code of 1986 to establish a deduction for certain overtime payments.”
No CRS summary available for this bill.
This section establishes a new above-the-line deduction under new IRC §224 for overtime compensation (i.e., pay at 1.5 times the regular rate for hours exceeding limits under FLSA §7 or certain agreements) of up to $10,000 ($20,000 for joint returns) for taxable years beginning after December 31, 2025, with the amount phased out (but not below zero) by $50 for each $1,000 (or fraction thereof) of modified adjusted gross income over $100,000 ($200,000 for joint returns). The deduction is available to non-itemizers (via amendment to IRC §63(b)); for itemizers, it is exempt from miscellaneous itemized deduction rules (IRC §67) and the overall limitation on itemized deductions (IRC §68). This section also requires employers to report total overtime compensation on Form W-2 (amending IRC §6051) and directs the Treasury Secretary to adjust income tax withholding tables and procedures (under IRC §3402).