Official Summaries

No Tax On Overtime Act of 2025

This bill excludes from gross income for federal income tax purposes overtime compensation paid for hours worked in excess of 40 hours per week (as required by the Fair Labor Standards Act of 1938). Under current law, overtime compensation paid to a taxpayer is included in gross income for purposes of calculating federal income taxes.

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1046 Introduced in Senate (IS)]

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119th CONGRESS
  1st Session
                                S. 1046

    To amend the Internal Revenue Code of 1986 to exclude overtime 
     compensation from gross income for purposes of the income tax.


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                   IN THE SENATE OF THE UNITED STATES

                             March 13, 2025

  Mr. Hawley introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

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                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to exclude overtime 
     compensation from gross income for purposes of the income tax.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Tax On Overtime Act of 2025''.

SEC. 2. EXCLUSION OF OVERTIME COMPENSATION FROM GROSS INCOME.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139I the following new section:

``SEC. 139J. OVERTIME COMPENSATION.

    ``Gross income shall not include overtime compensation required 
under section 7 of the Fair Labor Standards Act of 1938.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139I the following new item:

``Sec. 139J. Overtime compensation.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received after the date of the enactment of this Act.
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