Bill > HR3118

This bill proposes a new tax deduction for employees who receive overtime compensation, allowing workers to deduct taxes on overtime pay up to 300 hours per year. Specifically, the bill creates a tax deduction for "qualified overtime compensation" as defined by the Fair Labor Standards Act, which is any overtime pay earned above an employee's regular pay rate. The deduction would be subject to income limitations, with the amount phasing out for individuals earning over $100,000 (or $200,000 for joint returns), reducing by $100 for every $1,000 of income above those thresholds. To claim the deduction, taxpayers must include the Social Security number of the employee receiving overtime compensation on their tax return, and employers would be required to report the total amount of qualified overtime compensation on W-2 forms. The bill aims to provide financial relief for workers who earn extra income through overtime, effectively reducing the tax burden on additional work hours. The provisions would take effect for taxable years beginning after December 31, 2024, giving employers and employees time to prepare for the new tax treatment of overtime pay.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/3118/all-info