I
119THCONGRESS
1
STSESSION H. R. 561
To amend the Internal Revenue Code of 1986 to establish a deduction
for certain overtime payments.
IN THE HOUSE OF REPRESENTATIVES
JANUARY20, 2025
Mr. B
ACONintroduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to establish
a deduction for certain overtime payments.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Overtime Pay Tax Re-4
lief Act of 2025’’. 5
SEC. 2. DEDUCTION FOR OVERTIME COMPENSATION. 6
(a) I
NGENERAL.— 7
(1) D
EDUCTION ALLOWED .—Part VII of sub-8
chapter B of chapter 1 of the Internal Revenue Code 9
of 1986 is amended by redesignating section 224 as 10
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section 225 and by inserting after section 223 the 1
following new section: 2
‘‘SEC. 224. OVERTIME COMPENSATION. 3
‘‘(a) I
NGENERAL.—There shall be allowed as a de-4
duction an amount equal to so much of any overtime com-5
pensation received by an individual as does not exceed 20 6
percent of such individual’s other wages from the same 7
employer for the taxable year. 8
‘‘(b) O
VERTIMECOMPENSATION.—For purposes of 9
this section, the term ‘overtime compensation’ means over-10
time compensation required under section 7 of the Fair 11
Labor Standards Act of 1938. 12
‘‘(c) L
IMITATION.—No deduction shall be allowed 13
under subsection (a) for any taxpayer whose adjusted 14
gross income for the taxable year exceeds— 15
‘‘(1) in the case of a married couple filing joint-16
ly, $200,000, 17
‘‘(2) in the case of a head of household, 18
$150,000, or 19
‘‘(3) in the case of any other individual, 20
$100,000. 21
‘‘(d) T
ERMINATION.—No deduction shall be allowed 22
under subsection (a) for any amounts received after De-23
cember 31, 2029.’’. 24
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(2) CONFORMING AMENDMENT .—The table of 1
sections for part VII of subchapter B of chapter 1 2
of such Code is amended by redesignating the item 3
relating to section 224 as relating to section 225 4
and by inserting after the item relating to section 5
223 the following new item: 6
‘‘Sec. 224. Overtime payments.’’.
(b) DEDUCTIONALLOWED TO NON-ITEMIZERS.— 7
Section 63(b) of the Internal Revenue Code of 1986 is 8
amended by striking ‘‘and’’ at the end of paragraph (3), 9
by striking the period at the end of paragraph (4) and 10
inserting ‘‘and’’, and by adding at the end the following 11
new paragraph: 12
‘‘(5) the deduction provided in section 224.’’. 13
(c) N
ON-APPLICATION OF CERTAINLIMITATIONS 14
FORITEMIZERS.— 15
(1) D
EDUCTION NOT TREATED AS A MISCELLA -16
NEOUS ITEMIZED DEDUCTION .—Section 67(b) of the 17
Internal Revenue Code of 1986 is amended by strik-18
ing ‘‘and’’ at the end of paragraph (11), by striking 19
the period at the end of paragraph (12) and insert-20
ing ‘‘, and’’, and by adding at the end the following 21
new paragraph: 22
‘‘(13) the deduction under section 224 (relating 23
to overtime compensation).’’. 24
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(2) DEDUCTION NOT TAKEN INTO ACCOUNT 1
UNDER OVERALL LIMITATION .—Section 68(c) of the 2
Internal Revenue Code of 1986 is amended by strik-3
ing ‘‘and’’ at the end of paragraph (2), by striking 4
the period at the end of paragraph (3) and inserting 5
‘‘, and’’, and by adding at the end the following new 6
paragraph: 7
‘‘(4) the deduction under section 224 (relating 8
to overtime compensation).’’. 9
(d) W
ITHHOLDING.—The Secretary of the Treasury 10
(or the Secretary’s delegate) shall modify the tables and 11
procedures prescribed under section 3402(a) of the Inter-12
nal Revenue Code of 1986 to take into account the deduc-13
tion allowed under section 224 of such Code (as added 14
by this Act). 15
(e) E
FFECTIVEDATE.—The amendments made by 16
this section shall apply to amounts received after the date 17
of the enactment of this Act. 18
Æ
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