Workers could pay less in taxes on some of their overtime earnings.
This bill would let many workers deduct a portion of their overtime pay from their taxable income, potentially lowering their tax bill. It would also require employers to report this specific overtime pay on W-2 forms. These changes would take effect for taxable years starting after December 31, 2024.
Today, all overtime pay is generally taxed as regular income. If this bill passes, workers would be able to deduct the pay for up to 300 hours of overtime from their taxable income each year, potentially lowering their tax bill. Employers would also need to report this specific overtime amount on W-2 forms, and the deduction would take effect for taxable years starting after December 31, 2024.
HR 3118 · 119th Congress · April 30, 2025 · AI Summary by gemini-2.5-flash · 8/10
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