Table Of Contents
- When does No Tax on Overtime Start? Overview of The Bill
- The Proposal by Senator Roger Marshall
- When does No Tax on Overtime Start? Who Can Benefit from This?
- The Categorical Classifications
- Categorisation Based on Income Group
- Benefits for Elderly People
- Tax Dedication in Other Aspects
- When Does No Tax on Overtime Start? Threshold
- When Will It Be Imposed? When Will Trump's No Tax on Overtime Start?
- Wrapping It Up
When does No Tax on Overtime Start? Is Overtime Payment Taxable?
How sharp is your memory? “Do you remember about the Big Big Beautiful Bill”? Do you remember the slogan that was raised by Donald Trump in the 2016 elections, which said, “No Tax For Overtime”?
On May 6th, 2025, Senator Roger Marshall proposed a bill that may soon implement a no tax on overtime payments.
Read the article to learn when the No Tax For Overtime policy will start, who will be its beneficiaries, and under which category, who will receive what kind of exemption.
When does No Tax on Overtime Start? Overview of The Bill
These ambitions were introduced by Donald Trump’s 2016 campaign, during which he mentioned the “One Big Beautiful Bill.” This bill is part of the broader Republican package of ambitions, which mostly deals with Tax Cuts under different categories.
Since then, people have been anticipating “when will Trump’s no-tax on overtime start?” and which categories of people will benefit from these exemptions.
Relevant discussions also include how this bill will influence employees and employers, and in what ways both parties will benefit.
The Proposal by Senator Roger Marshall
On the 6th of May, the Bill was proposed by a Senator.
Senator Roger Marshall and Tommy Tuberville introduced the Overtime Wage Tax Relief Act in the US Senate on May 6, 2025.
The legislation is aimed at keeping President Donald Trump’s promise on “ no tax on overtime”, it tries to make it more convenient for middle-income earners while providing them with Tax Exemptions.
When does No Tax on Overtime Start? Who Can Benefit from This?
Among many, this bill benefits middle-income employees who work extra hours to make extra money while exempting them from taxes on overtime.
While the Bill aims to help middle-income professionals in several professions, such as construction work, nursing, and hourly and daily wagers, it sets its limits as it does not try to benefit those with High incomes.
The bill has several categories under which an individual can benefit from tax exemption. People belonging to different categories are supposed to get exemptions in different ways.
The Categorical Classifications
The Bill categorically classifies its beneficiaries while considering several factors, which include things like marital status and also the income groups the beneficiaries belong to. The Categorical classifications are as follows:
Classification Based on Marital Status.
- Individual Workers who work overtime: They can get a Tax exemption of up to $10000 in their taxable income.
- Married Couples: Married Couples may get an exemption of up to $20000
Categorisation Based on Income Group
- People who get income up to $100,000 can get an exemption of around $10000
- Couples earning $200,000 can get an exemption of around $20000
The government has put a cap on the exemption, so no individual may benefit more than the above-mentioned amount in terms of Tax exemption.
A marginal Tax Rate of around 22% applies to several tax payers in that range and may help many save up to $4,400 in Income Tax, which happens to be a massive amount.
Benefits for Elderly People
This proposal also keeps in mind the needs and requirements of elderly people.
Increased Standard Deduction
- Individuals 65+: from $2,000 → $5,000
- Married couples (both 65+): from $3,200 → $10,000
This feature comes with Trump’s promise to keep no tax on Social Security. Since direct tax cuts can not be implemented, reconciliation is being used.
Tax Dedication in Other Aspects
The bill aims to provide citizens with several other benefits, including no tax on tips and other expenses.
The proposal lowers the tax on domestic manufacturing and increases the interest in people buying cars made in America.
When Does No Tax on Overtime Start? Threshold
The criterion for availing this benefit is assured with the benefit AGI, which stands for Adjusted Gross Income. The required AGI for availing this benefit is.
- $100,000 for individuals
- $200,000 for couples
For people whose AGI exceeds the limit as mentioned earlier, the exemption amount shall be deducted gradually.
After reaching a certain limit, the beneficiary shall no longer be able to benefit from this system.
When Will It Be Imposed? When Will Trump’s No Tax on Overtime Start?
The bill was introduced in the US Senate on May 6, 2025, and it has not yet been passed into law.
For it to become an act, it has to go through the Senate Finance Committee, and such bills must be passed under the committee’s auspices.
The Senate committee further changes this bill, which may be debated further.
The Bill has yet to be passed by the Senate. It would require the President’s approval, after which it would be considered a bill.
Even if the bill gets the support of the republicans and does not get majority support from the democrats, it will have a massive chance to become an act of a bill.
Thus, it is still unknown when the overtime tax starts, as bills take time to become an act.
This is one of President Trump’s biggest ambitions, and he has used it in his campaign since 2016. Donald Trump supporters have been expecting it for a long time, making the bill more relevant.
It has been quite a while now since the House passed a budget bill without an overtime tax.
It was narrowly passed in the House on February 25th. Donald Trump has been encouraging this bill since it contains several of his campaign promises.
A vote took place in the House in February 2015-2017. The bill faced certain difficulties. All democrats, joined by one Republican, Rep. Thomas Massie, voted against the budget plan.
Now it all depends on whether the Senate approves of it or not. The Senate has yet to approve the spending bill.
Wrapping It Up
The bill increases optimism among middle-income people. It also aims to benefit the elderly and talks about tax exemptions for tips, daily wages, and several other things. As people’s income gradually increases, the deduction amount also decreases.
This ensures that the tax exemption only benefits those who are in need. It is too early for anyone to decide when does no tax on overtime start.
Even though the bill has been anticipated by Trump supporters for quite some time, there is a certain amount of uncertainty.
The extensive use of the much-anticipated bill in the campaigns can make it important for Donald Trump to achieve it by hook or crook. Hence, there are big chances of it becoming a reality, which might benefit several people all across the USA.
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