[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1606 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 1606
To amend the Internal Revenue Code of 1986 to establish a deduction for
certain overtime payments.
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IN THE SENATE OF THE UNITED STATES
May 6, 2025
Mr. Marshall (for himself, Mr. Tuberville, Mr. Ricketts, and Mr.
Justice) introduced the following bill; which was read twice and
referred to the Committee on Finance
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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 Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Overtime Wages Tax Relief Act''.
SEC. 2. DEDUCTION FOR OVERTIME COMPENSATION.
(a) In General.--
(1) Deduction allowed.--Part VII of subchapter B of chapter
1 of the Internal Revenue Code of 1986 is amended by
redesignating section 224 as section 225 and by inserting after
section 223 the following new section:
``SEC. 224. OVERTIME COMPENSATION.
``(a) In General.--There shall be allowed as a deduction an amount
equal to so much of any overtime compensation received by an individual
as does not exceed $10,000 ($20,000 in the case of a joint return) for
the taxable year.
``(b) Limitation.--The amount of the deduction allowable under
subsection (a) shall be reduced (but not below zero) by $50 for each
$1,000 (or fraction thereof) by which the taxpayer's modified adjusted
gross income exceeds $100,000 ($200,000 in the case of a joint return).
For purposes of the preceding sentence, the term `modified adjusted
gross income' means adjusted gross income increased by any amount
excluded from gross income under section 911, 931, or 933.
``(c) Overtime Compensation.--For purposes of this section, the
term `overtime compensation' means compensation that is paid to a
taxpayer--
``(1) at a rate of not less than one and one-half times the
regular rate at which the taxpayer is employed, and
``(2) for work for a single employer that is in excess of a
maximum number of hours of such work for a specified period of
time as required pursuant to--
``(A) section 7 of the Fair Labor Standards Act of
1938, or
``(B) an agreement that--
``(i) is a collective bargaining agreement
or an agreement or understanding arrived at
between the employer and the employee before
performance of the work, and
``(ii) provides that such maximum number of
hours for a specified period of time is not
less than 40 hours for a 7-day work period.
``(d) Regulations.--The Secretary shall provide such regulations or
other guidance as may be necessary to carry out this section.''.
(2) Conforming amendment.--The table of sections for part
VII of subchapter B of chapter 1 of such Code is amended by
redesignating the item relating to section 224 as relating to
section 225 and by inserting after the item relating to section
223 the following new item:
``Sec. 224. Overtime payments.''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of paragraph (3), by striking the period at the end of paragraph (4)
and inserting ``and'', and by adding at the end the following new
paragraph:
``(5) the deduction provided in section 224.''.
(c) Non-Application of Certain Limitations for Itemizers.--
(1) Deduction not treated as a miscellaneous itemized
deduction.--Section 67(b) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of paragraph (11), by
striking the period at the end of paragraph (12) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(13) the deduction under section 224 (relating to
overtime compensation).''.
(2) Deduction not taken into account under overall
limitation.--Section 68(c) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(4) the deduction under section 224 (relating to overtime
compensation).''.
(d) Reporting.--Section 6051(a) of the Internal Revenue Code of
1986 is amended by striking ``and'' at the end of paragraph (16), by
striking the period at the end of paragraph (17) and inserting ``,
and'', and by inserting after paragraph (17) the following new
paragraph:
``(18) the total amount of overtime compensation as defined
in section 224(b).''.
(e) Withholding.--The Secretary of the Treasury (or the Secretary's
delegate) shall modify the tables and procedures prescribed under
section 3402(a) of the Internal Revenue Code of 1986 to take into
account the deduction allowed under section 224 of such Code (as added
by this Act).
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
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