What This Bill Does · Plain English
Summary · Congress.gov
Overtime Pay Tax Relief Act of 2025 This bill allows a tax deduction for overtime compensation received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 20% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for an individual with adjusted gross income exceeding $100,000 (or $150,000 for a head of the household and $200,000 for a married couple filing a joint return).
Action Timeline
2025-01-20
Referred to the House Committee on Ways and Means.
2025-01-20
Introduced in House
2025-01-20
Introduced in House
Frequently Asked Questions
Did HR.561 pass?
HR.561 is still alive. Current stage: COMMITTEE. Pass likelihood: 39%.
What does HR.561 do?
Overtime Pay Tax Relief Act of 2025 This bill allows a tax deduction for overtime compensation received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 20% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for an individual with adjusted gross income exceeding $100,000 (or $150,000 for a head of the household and $200,000 for a married couple filing a joint return).
Who sponsored HR.561?
HR.561 was sponsored by Don Bacon (R-Nebraska).
Full Bill Text
119 HR 561 IH: Overtime Pay Tax Relief Act of 2025 U.S. House of Representatives 2025-01-20 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. I 119th CONGRESS 1st Session H. R. 561 IN THE HOUSE OF REPRESENTATIVES January 20, 2025 Mr. Bacon introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to establish a deduction for certain overtime payments. 1. Short title This Act may be cited as the Overtime Pay Tax Relief Act of 2025 . 2. Deduction for overtime compensation (a) In general (1) Deduction allowed Part VII of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating section 224 as section 225 and by inserting after section 223 the following new section: 224. Overtime compensation (a) In general There shall be allowed as a deduction an amount equal to so much of any overtime compensation received by an individual as does not exceed 20 percent of such individual’s other wages from the same employer for the taxable year. (b) Overtime compensation For purposes of this section, the term overtime compensation means overtime compensation required under section 7 of the Fair Labor Standards Act of 1938. (c) Limitation No deduction shall be allowed under subsection (a) for any taxpayer whose adjusted gross income for the taxable year exceeds— (1) in the case of a married couple filing jointly, $200,000, (2) in the case of a head of household, $150,000, or (3) in the case of any other individual, $100,000. (d) Termination No deduction shall be allowed under subsection (a) for any amounts received after December 31, 2029. . (2) Conforming amendment The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as relating to section 225 and by inserting after the item relating to section 223 the following new item: Sec. 224. Overtime payments. . (b) Deduction allowed to non-Itemizers Section 63(b) of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting and , and by adding at the end the following new paragraph: (5) the deduction provided in section 224. . (c) Non-Application of certain limitations for itemizers (1) Deduction not treated as a miscellaneous itemized deduction Section 67(b) of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (11), by striking the period at the end of paragraph (12) and inserting , and , and by adding at the end the following new paragraph: (13) the deduction under section 224 (relating to overtime compensation). . (2) Deduction not taken into account under overall limitation Section 68(c) of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting , and , and by adding at the end the following new paragraph: (4) the deduction under section 224 (relating to overtime compensation). . (d) Withholding The Secretary of the Treasury (or the Secretary's delegate) shall modify the tables and procedures prescribed under section 3402(a) of the Internal Revenue Code of 1986 to take into account the deduction allowed under section 224 of such Code (as added by this Act). (e) Effective date The amendments made by this section shall apply to amounts received after the date of the enactment of this Act.
Loading intelligence layer…