H.R. 3118

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3118 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 3118

To amend the Internal Revenue Code of 1986 to allow a deduction for 
qualified overtime compensation.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 30, 2025

Mr. Moran introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to allow a deduction for 
qualified overtime compensation.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``No Tax on Overtime Act''.

SEC. 2. NO TAX ON OVERTIME.

(a) Deduction Allowed.--Part VII of subchapter B of chapter 1 is 
amended by redesignating section 224 as section 225 and by inserting 
after section 223 the following new section:

``SEC. 224. QUALIFIED OVERTIME COMPENSATION.

``(a) In General.--There shall be allowed as a deduction an amount 
equal to the qualified overtime compensation received during the 
taxable year.
``(b) Limitations.--
``(1) Maximum hours.--For purposes of determining the 
amount of the deduction allowed under subsection (a), the 
amount of qualified overtime compensation taken into account 
under subsection (a) for any taxable year shall not exceed the 
amount of such compensation which relates to not more than 300 
hours of service.
``(2) Joint returns.--In the case of a joint return, 
paragraphs (1) and (2) shall be applied separately with respect 
to the qualified overtime compensation of each spouse.
``(3) Phaseout based on modified adjusted gross income.--
The amount of the deduction under subsection (a) (after the 
application of paragraphs (1), (2), and (3)) shall be reduced 
by $100 for every $1,000 by which the modified adjusted gross 
income of the taxpayer for the taxable year exceeds $100,000 
($200,000, in the case of a joint return).
``(4) Modified adjusted gross income.--For purposes of this 
subsection, the term `modified adjusted gross income' means the 
adjusted gross income of the taxpayer for the taxable year 
increased by any amount excluded from gross income under 
section 911, 931, or 933.
``(c) Qualified Overtime Compensation.--For purposes of this 
section, the term `qualified overtime compensation' means overtime 
compensation paid to an individual required under section 7 of the Fair 
Labor Standards Act of 1938 that is in excess of the regular rate (as 
used in such section) at which such individual is employed.
``(d) Social Security Number Required.--No deduction shall be 
allowed under this section with respect to qualified overtime 
compensation unless the taxpayer includes the social security number 
(as defined in section 24(h)(7)) of the individual to whom such 
compensation was paid on the return of tax for the taxable year.''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) is amended 
by striking ``and'' at the end of paragraph (3), by striking the period 
at the end of paragraph (4) and inserting ``and'', and by adding at the 
end the following new paragraph:
``(5) the deduction provided in section 225.''.
(c) Requirement To Include Overtime Compensation on W-2.--Section 
6051(a) is amended by striking ``and'' at the end of paragraph (16), by 
striking the period at the end of paragraph (17) and inserting ``, 
and'', and by inserting after paragraph (17) the following new 
paragraph:
``(18) the total amount of qualified overtime compensation 
(as defined in section 225(c)).''.
(d) Omission of Correct Social Security Number Treated as 
Mathematical or Clerical Error.--Section 6213(g)(2) is amended by 
striking ``and'' at the end of subparagraph (U), by striking the period 
at the end of subparagraph (V) and inserting ``, and'', and by 
inserting after subparagraph (V) the following new subparagraph:
``(W) an omission of a correct social security 
number required under section 225(d) (relating to 
deduction for qualified overtime).''.
(e) Clerical Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 is amended by redesignating the item relating 
to section 224 as an item relating to section 225 and by inserting 
after the item relating to section 223 the following new item:

``Sec. 224. Qualified overtime compensation.''.
(f) Withholding.--The Secretary of the Treasury (or the Secretary's 
delegate) shall modify the tables and procedures prescribed under 
section 3402(a) to take into account the deduction allowed under 
section 224 (as added by this Act).
(g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
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