Overview

• The Overtime Wages Tax Relief Act, introduced by Republican Senators Roger Marshall and Tommy Tuberville, would allow individuals to deduct up to $10,000 in overtime pay and $20,000 for married couples from federal income taxes.
• The deduction phases out for individuals earning over $100,000 and couples earning over $200,000, reducing eligibility by $50 for every $1,000 above these thresholds.
• The bill fulfills a key 2024 campaign promise by President Trump to eliminate federal taxes on overtime wages and has his formal endorsement.
• The International Brotherhood of Teamsters has announced its support for the legislation, citing its benefits for working Americans who rely on overtime pay to make ends meet.
• Fiscal watchdogs, including the National Taxpayers Union, warn the proposal could lead to significant revenue losses, with estimates ranging from $227 billion to $1.3 trillion over a decade, though the capped structure may reduce costs by 75%.