# Plain Language Summary: No Tax on Overtime Act

This bill would let workers deduct overtime pay from their taxable income, meaning they wouldn't have to pay federal income tax on that overtime money. Right now, overtime pay is treated like regular income and gets taxed. Under this bill, if you work overtime hours, you'd be able to subtract that overtime compensation from your income before calculating your taxes, which would reduce the amount of tax you owe.

The deduction comes with some important limits. You can only deduct overtime pay for up to 300 hours of work per year. If you're married and filing taxes jointly with your spouse, each of you gets your own 300-hour limit. There's also an income cap: if you make more than $100,000 per year (or $200,000 if you're married filing jointly), your deduction starts to shrink. For every $1,000 you earn above that threshold, your deduction gets reduced by $100. This means higher earners would get less benefit from this deduction.

The bill only applies to overtime pay that's legally required under federal labor law—specifically the extra pay you get for working more than 40 hours per week. It wouldn't apply to bonuses or other types of extra compensation. Employers would need to report your overtime pay on your W-2 form, and you'd need to include your Social Security number when claiming the deduction. The changes would take effect for taxes filed in 2025 and beyond.