# Plain Language Summary: Keep Every Extra Penny Act of 2024

This bill would allow workers to exclude overtime pay from their taxable income. In practical terms, if you work overtime and earn extra money at time-and-a-half or double-time, that overtime portion wouldn't count toward your federal income taxes. So if you normally earn $50,000 a year and make an additional $10,000 in overtime, you'd only pay federal income tax on the $50,000 under this bill, not the full $60,000.

The bill specifically applies to overtime compensation as defined by the Fair Labor Standards Act, which is the federal law that requires employers to pay workers extra for hours worked beyond 40 per week. This would primarily benefit hourly workers and salaried employees who regularly work overtime, such as nurses, construction workers, factory workers, and others in industries where overtime is common. The tax break would apply to any overtime pay received after the bill becomes law.

The financial impact depends on your tax bracket and how much overtime you work. Someone in a higher tax bracket would save more money than someone in a lower bracket earning the same overtime hours. For example, a worker in the 22% tax bracket earning $5,000 in overtime would save about $1,100 in federal taxes. However, this bill would reduce federal tax revenue, which could affect government funding for various programs unless spending is cut elsewhere or other revenue sources are found.

Keep Every Extra Penny Act of 2024

Keep Every Extra Penny Act of 2024This bill excludes from gross income, for income tax purposes, overtime compensation required to be paid by the Fair Labor Standards Act of 1938 (hours of work in excess of 40 in a week).