New Tax Deduction for Overtime Pay Under the One Big Beautiful Bill Act
The One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, introduces a temporary tax deduction for overtime pay, allowing eligible taxpayers to deduct up to $12,500 (or $25,000 for joint filers) of overtime earnings above their regular pay rate. The deduction phases out for single filers earning over $150,000 and joint filers earning over $300,000. The policy aims to provide tax relief for approximately 143 million workers.
Topics: FLSA One Big Beautiful Bill Act overtime pay tax deductions tax reform