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S 1046119th CongressIntroduced
No Tax On Overtime Act of 2025
Introduced: Oct 29, 2025
Economy & TaxesLabor & Employment
Standard Summary
Comprehensive overview in 1-2 paragraphs
The No Tax On Overtime Act of 2025 amends the Internal Revenue Code to exclude overtime compensation mandated by the Fair Labor Standards Act from gross income for federal income tax purposes, effective immediately upon enactment for all future overtime payments received by workers.
Key Points
- 1The legislation creates a new tax code section 139J specifically exempting overtime wages from federal income taxation under the Internal Revenue Code of 1986.
- 2This exclusion applies exclusively to overtime compensation required by Section 7 of the Fair Labor Standards Act of 1938 governing overtime pay rules.
- 3The bill takes immediate effect after enactment, meaning all overtime earnings received subsequent to the law's passage would be tax-free for income tax purposes.
Impact Areas
Non-exempt hourly workers earning overtime pay under FLSA regulationsFederal government tax revenue collections from personal income taxesHouseholds relying on overtime income for financial stability and discretionary spending
Generated by legislative-analysis-ai on Nov 3, 2025