U.S. Sen. Tommy Tuberville (R-Auburn) recently joined his colleagues in filing legislation to create a tax deduction for overtime pay.
The Overtime Wages Tax Relief Act would create a tax deduction for overtime wages up to $10,000 for individuals and $20,000 for married couples. The Act is designed to focus mainly on middle-class individuals and families.
Additionally, the bill would do the following:
- Include phase-out eligibility based on income:
- The deduction begins to phase out when income reaches $100,000 for individuals or $200,000 for married couples.
- The deduction is reduced by $50 for every $1,000 in income above the threshold, similar to the Child Tax Credit.
- Define overtime to include a wide range of workers such as law enforcement officers, nurses, trade workers, factory employees, and other eligible professions, and
- Require employers to report overtime earnings to ensure transparency and accuracy in claiming the deduction.
In celebrating the bill’s filing, Tuberville boasted of Alabama’s statewide efforts to cut the overtime tax in 2023.
Alabama did, in fact, cut overtime taxes in 2023 with a bill by House Minority Leader Anthony Daniels (D-Huntsville). The bill included a provision that it would expire in June 2025. However, state lawmakers have deigned not to extend it, citing concerns with an excessive hit to state coffers.
With the Republican majority in Congress, combined with Trump’s “no tax on overtime” campaign promise, the future of Tuberville’s filed legislation looks promising.
U.S. Sens. Roger Marshall (R-Kan)., Jim Justice (R-W. Va.) and Pete Ricketts (R-Neb.) joined Tuberville in filing the Act.
“President Trump promised relief for millions of hardworking Americans, and we’re proud to help deliver on that with the Overtime Wages Tax Relief Act,” Marshall said. “Our legislation ensures Kansans keep more of their hard-earned wages and codifies a key pillar of President Trump’s pro-worker agenda as we work to pass our ‘One Big Beautiful Bill.’ It’s time to put American workers first again, and I’m proud to work with Senators Tuberville, Ricketts, and Justice to ensure we do just that.”
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