The No Tax on Overtime for All Workers Act would allow workers to deduct overtime compensation from their taxable income. Specifically, the bill would let employees exclude from federal income taxes any pay they receive above their regular hourly rate for overtime work, either as required under federal labor law or through voluntary agreements with employers that set specific overtime thresholds. The legislation covers most private sector workers as well as certain railroad and airline employees under the Railway Labor Act. The deduction would take effect retroactively for tax years beginning after December 31, 2024, meaning workers could potentially claim it on their 2025 tax returns going forward. The bill does not specify any direct federal spending or revenue estimates.
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