Us Congress 2025-2026 Regular Session

Us Congress House Bill HB561

Introduced
1/20/25  

Caption

Overtime Pay Tax Relief Act of 2025This bill allows a tax deduction for overtime compensation received by an individual, subject to income limitations, through 2029. The amount of the deduction may not exceed 20% of the individual’s regular wages from the same employer. Further, the deduction is not allowed for an individual with adjusted gross income exceeding $100,000 (or $150,000 for a head of the household and $200,000 for a married couple filing a joint return).  

Impact

If enacted, HB 561 would amend the Internal Revenue Code to establish clear guidelines for claiming such deductions. The introduction of this deduction could lead to changes in tax filings for eligible individuals and may incentivize companies to offer more overtime opportunities. Moreover, the bill sets income thresholds that restrict eligibility, allowing only those below $200,000 for joint filers, $150,000 for heads of household, and $100,000 for individual taxpayers to benefit from this tax relief.

Summary

House Bill 561, titled the "Overtime Pay Tax Relief Act of 2025", aims to introduce a tax deduction for certain overtime compensation received by employees. This bill proposes that individuals can claim a deduction equivalent to 20% of their overtime pay, as long as the overtime compensation does not exceed this threshold in relation to their regular wages. The legislation seeks to alleviate financial burdens on workers who regularly earn overtime pay while offering incentives to employers to maintain fair compensation practices.

Contention

Notably, there may be points of contention surrounding the bill regarding its fiscal implications and the potential for it to disproportionately benefit higher-income earners who may more frequently exceed the defined limits. Critics may argue that the income caps do not adequately reflect the needs of lower-income workers who rely significantly on overtime pay. Additionally, concerns may arise about how the bill fits within the broader context of labor regulations and whether it provides enough support for employees affected by fluctuating work hours due to shifts in economic conditions.

Congress_id

119-HR-561

Policy_area

Taxation

Introduced_date

2025-01-20

Companion Bills

No companion bills found.

Previously Filed As

US HB109

This bill allows an individual taxpayer a deduction from gross income for insurance premiums paid for the health care coverage of the taxpayer and the taxpayer's spouse and dependents. The bill makes the deduction available whether or not the taxpayer itemizes other deductions.

US HB9799

Overtime Pay Tax Relief Act of 2024

US HB176

This bill allows a deduction from gross income (above the line deduction) for attorney fees and court costs awarded with respect to a qualifying wildfire disaster (i.e., any forest or range fire that is a federally declared disaster, occurs in a disaster area, and occurs in 2015 or later). The bill excludes from the gross income of a taxpayer, for income tax purposes, amounts paid to compensate victims for losses or damages in connection with a qualifying wildfire disaster.

US HB108

Small Business Prosperity Act of 2023 This bill modifies the tax deduction for qualified business income to (1) make such deduction permanent, (2) limit to 21% the top tax rate on qualified business income, (3) repeal the limitation on the deduction based on amount of wages paid, and (4) revise the definition of qualified trade or business to mean any trade or business other than the trade of business of performing services as an employee. The bill provides that a change in the organizational structure of a corporation is not a taxable event if there is no change among the owners, their ownership interests, or the assets of the organization, The bill repeals the estate tax after 2022.

US HB10308

To amend the Internal Revenue Code of 1986 to allow for payments to certain individuals who dye fuel, and for other purposes.

US HB339

SALT Marriage Penalty Elimination Act This bill increases from $10,000 to $20,000 the amount that a married couple filing a joint tax return may deduct as state and local taxes (thus eliminating the tax effect known as the marriage penalty with respect to the deduction).

US HB418

Affordable Housing Equity Act of 2023 This bill requires allocations through 2033 of low-income housing credit amounts for buildings designated to serve certain low-income households (i.e., aggregate household income does not exceed the greater of 30% of area median gross income, or 100% of an amount equal to the federal poverty line). The bill also increases the rate of the low-income housing credit for projects designated to serve such low-income households.

US HB10500

To amend title 11, United States Code, to add a bankruptcy chapter relating to the debt of individuals, and for other purposes.

US HB312

Emergency Savings Accounts Act of 2023 This bill allows an individual taxpayer occupying a residence a deduction from gross income for up to $5,000 of amounts paid into such taxpayer's emergency savings account. The bill defines emergency savings account as an account established exclusively to pay the qualified disaster and public health emergency expenses of the account beneficiary. The bill defines qualified disaster and public health emergency expenses as disaster mitigation expenses, disaster recovery expenses, public health emergency expenses, and unemployment-related expenses.

US SB5478

A bill to amend the Internal Revenue Code of 1986 to increase the deduction for certain expenses of elementary and secondary school teachers and to allow an equivalent deduction for home educators.

Similar Bills

No similar bills found.