← Back to Bills
H.R. 5475House119th Congress (2025-2027)In Committee

No Tax on Overtime for All Workers Act

To amend the Internal Revenue Code of 1986 to allow a deduction for certain overtime compensation.

Sponsored by Nicole MalliotakisRep. Nicole Malliotakis (R-NY)
Introduced September 18, 2025

AI-Generated Summary

Updated November 23, 2025 at 9:54 PM UTC

The No Tax on Overtime for All Workers Act changes the Internal Revenue Code so that workers can deduct certain overtime pay from their taxable income. It defines "qualified overtime compensation" to include overtime required by federal labor law and overtime paid under pre‑arranged agreements that exceed a 40‑hour work week (or similar limits for railway employees). The deduction becomes available for tax years starting in 2025.

Key Provisions

  • Amends the tax code to let workers deduct "qualified overtime compensation" from taxable income.
  • "Qualified overtime compensation" includes any overtime pay required by the Fair Labor Standards Act that exceeds the regular rate, and any extra pay agreed in advance with an employer that is for work beyond a standard 40‑hour week (or comparable limits for railway workers).
  • The deduction applies only when the overtime agreement is made before the work is performed and covers a single employer.
  • The change takes effect for taxable years beginning after December 31, 2024.

Legislative Activity

Stay on top of the latest movement without scrolling through every action

1 earlier action
HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

September 18, 2025

View full timeline
HouseIntro Referral

Introduced in House

September 18, 2025

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

September 18, 2025

Bill Text

Latest available legislative text

Reading Mode
Latest
Raw Text PDF XML
Introduced in HouseIssued September 18, 2025

I

119th CONGRESS

1st Session

H. R. 5475

IN THE HOUSE OF REPRESENTATIVES

September 18, 2025

Ms. Malliotakis (for herself, Mrs. Sykes, Mr. LaLota, Mr. Suozzi, Mr. Fitzpatrick, and Mr. Horsford) 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 allow a deduction for certain overtime compensation.

1.

Short title

This Act may be cited as the No Tax on Overtime for All Workers Act.

2.

Deduction for certain overtime compensation

(a)

In general

Section 225(c)(1) of the Internal Revenue Code of 1986 is amended to read as follows:

(1)

In general

For purposes of this section, the term qualified overtime compensation means—

(A)

any overtime compensation paid to an individual required under section 7 of the Fair Labor Standards Act of 1938 that is in excess of the regular rate (as used in such section) at which such individual is employed, or

(B)

any compensation paid to an individual that is in excess of the regular rate at which such individual is employed if—

(i)

such compensation is paid for work for a single employer pursuant to an agreement between the employee (or labor organization representing such employee) and employer entered into before the performance of the work, and

(ii)

either—

(I)

such work is in excess of a standard number of hours of such work for a specified period of time, and such agreement specifies that such standard number of hours for a specified period of time is not less than 40 hours for a 7-day work period, or

(II)

if the employee (including any crewmember or flight crewmember, or rail operating craft employee) and employer referred to in clause (i) are both covered by the Railway Labor Act, such work is beyond scheduled or anticipated hours on duty or for hours on duty that exceed a maximum number of hours with respect to a specified period of time (as determined pursuant to such agreement).

.

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2024.