S 4310
No Tax on Overtime for All Workers Act
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Bill overview
This bill aims to change how overtime pay is treated for tax purposes. It proposes to allow workers to deduct certain overtime compensation on their tax returns, specifically overtime paid to employees who meet certain criteria under the Fair Labor Standards Act. The bill clarifies the definition of ‘qualified overtime compensation’ to include overtime paid under pre-existing agreements and beyond standard work hours, particularly for rail workers. This change would provide a tax benefit to workers receiving overtime pay.
Key provisions
- Allows a deduction for ‘qualified overtime compensation’.
- Defines ‘qualified overtime compensation’ to include overtime under the Fair Labor Standards Act.
- Includes compensation paid under pre-existing agreements exceeding standard hours.
- Specifically covers overtime for rail workers beyond scheduled hours.
Who is affected
- Employees
- Taxpayers
- Rail workers
- Employers
Notable changes
- Expands the definition of overtime compensation eligible for deduction.
- Clarifies the requirements for pre-existing agreements to qualify for the deduction.
Fiscal impact
The bill could potentially reduce tax revenue for the federal government by allowing taxpayers to deduct overtime compensation.
Sponsors
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Primary sponsor
Cosponsor
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119th CONGRESS — 2d Session
S. 4310
IN THE SENATE OF THE UNITED STATES
A BILL
To amend the Internal Revenue Code of 1986 to allow a deduction for certain overtime compensation.
This Act may be cited as the No Tax on Overtime for All Workers Act
.
qualified overtime compensationmeans—
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
either—
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
The amendment made by this section shall apply to taxable years beginning after December 31, 2024.