Congress Considers “No Tax on Overtime for All Workers Act”
A new bill, H.R. 4740, titled the “No Tax on Overtime for All Workers Act,” has been introduced in the House of Representatives. The bill, officially published on August 5, 2025, aims to address how overtime pay is treated for tax purposes, proposing a significant change that could benefit many American workers.
The core of the “No Tax on Overtime for All Workers Act” is to exempt overtime earnings from federal income tax. Currently, overtime pay is generally subject to the same income tax rates as regular wages. Proponents of the bill argue that this taxation can discourage workers from taking on additional hours, thereby limiting their earning potential and potentially impacting businesses that rely on overtime labor.
By removing the tax burden on overtime, the legislation seeks to provide a direct financial incentive for employees to work longer hours when needed. This could translate into increased take-home pay for individuals who frequently work overtime, such as those in manufacturing, healthcare, and service industries where extra shifts are common. The hope is that this added income will boost household savings, consumer spending, and overall economic activity.
The “No Tax on Overtime for All Workers Act” represents a legislative effort to recognize and reward the dedication of workers who go above and beyond their standard work schedules. It aligns with a broader conversation about worker compensation and economic fairness in the United States.
As the bill moves through the legislative process, it will likely undergo review in various committees, where its potential economic impacts, including effects on government revenue and business operations, will be thoroughly examined. Further details regarding the specific mechanisms for implementing the tax exemption and any potential limitations or eligibility criteria will become clearer as the bill progresses. This legislation, if enacted, could represent a notable shift in how overtime earnings are treated, offering a potential financial lift to a broad segment of the American workforce.
H.R. 4740 (IH) – No Tax on Overtime for All Workers Act
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