House Republicans Advance Proposal to Eliminate Federal Taxes on Overtime Pay

The measure, part of a broader GOP budget plan, aligns with Donald Trump's campaign promises but faces hurdles before becoming law.

The House of Representatives narrowly passed a budget resolution that includes a proposal to eliminate federal income taxes on overtime pay.
The plan, part of the GOP's 2025 budget framework, reflects key promises from Donald Trump's presidential campaign, including tax cuts on tips and Social Security benefits.
The proposal, known as the Keep Every Extra Penny (KEEP) Act, aims to allow workers to retain more of their earnings from overtime hours.
Critics, including the Tax Foundation, warn the measure could complicate the tax code, distort labor market decisions, and increase administrative costs for employers.
The resolution must still pass the Senate and undergo reconciliation before any changes to tax laws are enacted.