The LEO Fair Retirement Act addresses a longstanding issue for federal law enforcement officers: overtime hours that go unpaid due to pay caps. Currently, federal law limits how much overtime compensation officers can receive in a given period, which means officers often work significant extra hours without compensation. This bill allows law enforcement officers to include that uncompensated overtime in their retirement annuity calculations, improving their pension benefits. To do so, officers must make a lump-sum payment to cover the employer and employee contributions that would have been made on that overtime pay, or alternatively accept a reduced annuity. The bill applies to federal law enforcement across multiple agencies including FBI agents, Postal Inspectors, federal air marshals, and probation officers. The Office of Personnel Management must issue regulations within one year, and the changes take effect one year after the bill's enactment. Additionally, officers who make these lump-sum payments can claim a tax credit for the amounts paid.