Bill > HR5475

This bill amends the Internal Revenue Code to create a tax deduction for certain overtime compensation, allowing workers to receive a tax break on extra earnings from overtime work. Specifically, the bill defines "qualified overtime compensation" in two ways: first, as overtime pay required under the Fair Labor Standards Act that exceeds an employee's regular rate, and second, as compensation paid above an employee's regular rate under a pre-agreed arrangement with an employer. For the second category, the overtime must either exceed a standard work period of at least 40 hours per 7-day period, or, in the case of employees covered by the Railway Labor Act, involve hours beyond scheduled or anticipated duty hours. The bill's provisions would take effect for taxable years beginning after December 31, 2024, meaning workers could start claiming this deduction on their 2025 tax returns. The aim of the legislation appears to be providing financial relief to workers who put in additional hours beyond their standard work schedule, potentially incentivizing overtime work and offering some tax benefit to employees who work extra hours.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/5475/all-info