Is Trump getting rid of overtime taxes?

Yes. The no tax on overtime bill was included in the One Big Beautiful Bill that President Trump signed into law in July 2025. This new law creates a first-of-its-kind tax exemption for certain overtime pay, effective beginning in tax year 2025.

Is Trump paying no tax on overtime pay?

No tax on tips or overtime bill advances in Assembly with bipartisan support. Assembly lawmakers approved a bill Thursday to eliminate income taxes on cash tips and some overtime work, reflecting provisions established nationally by President Donald Trump's administration and embraced by lawmakers from both parties.

Is there going to be no overtime tax?

Yes, No Tax on Overtime was bundled into the sweeping tax act that became law on July 4, 2025. It also included a separate provision called “No Tax on Tips,” which allows certain taxpayers in eligible occupations to deduct up to $25,000 in voluntary tipped income from their federal tax return.

What is the new overtime rule in 2025?

The "new overtime rule" for 2025 isn't about when you get paid overtime, but rather a significant federal income tax deduction for eligible hourly workers, allowing them to deduct up to $12,500 ($25,000 for joint filers) of "qualified overtime compensation" (the extra half-time pay) from their federal taxes for tax years 2025-2028, under the new "One Big Beautiful Bill" (OBBBA). This is retroactive to January 1, 2025, but employers still withhold payroll taxes (Social Security/Medicare) on overtime; it's a federal income tax break. 

Has the overtime rule been overturned?

The court's order vacates the rule nationwide effective immediately, meaning that employers do not have to comply with the final rule. The final rule raised the minimum salary level from $35,568 to $43,888 in July 2024. The final rule would have raised the minimum salary level to $58,656 in January 2025.

No tax on overtime now law but there’s a catch

Did Trump judge block overtime for workers?

Trump Judge Blocks Overtime Pay for 4 million Workers – Posted November 18, 2024. On November 15, a federal judge in Texas blocked a rule that would have expanded overtime pay to millions of salaried workers throughout the US.

What is the Biden overtime rule?

Under the Biden administration, DOL issued a new regulation on overtime pay for these salaried workers, which would have expanded the right to overtime pay for 4.3 million workers, giving the right to overtime pay protections to most workers making under roughly $58,656 per year.

Who still pays $7.25 an hour?

Employers in states that haven't set their own higher minimum wage, or have set it at the federal level, still pay $7.25/hour, including states like Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin, and Wyoming, though few workers actually earn this due to local laws or employer choice, as many states have higher rates and local ordinances often mandate more, notes OnPay. 

Does overtime trigger higher taxes?

No. Overtime isn't taxed at a higher rate than your regular pay. But your paycheck withholding might make it look that way.

Did they change the overtime rules?

In 2017, NFL clubs approved shortening overtime in the regular season to 10 minutes from 15. The rule change was aimed at improving player safety. In 2022, NFL clubs approved a rule that allows both teams to possess the ball in overtime in the postseason.

Why is overtime taxed at 40%?

Overtime isn't taxed at a flat 40%; that's a myth stemming from your paycheck looking like you pay more because the higher gross pay from overtime pushes you into a higher withholding bracket, but it's still taxed at your normal progressive rates, with a new 2025-2028 law potentially allowing deductions for the overtime premium (the extra half-time pay) to reduce your actual tax bill later. The perceived high rate is due to higher withholding on increased income, not a special rate. 

What states do not tax overtime pay?

As of late 2025/early 2026, Alabama is the only state with a current, implemented law exempting overtime pay from state income tax (until mid-2025), while a recent federal law (the "One Big Beautiful Bill") allows a federal tax deduction for overtime (and tips) through 2028, impacting state policies, with some states like Michigan adopting similar rules or proposing them, but many others not yet following. 

Why is no overtime tax bad?

No tax on overtime is considered bad policy by many economists because it creates tax inequity, potentially costs the government billions in lost revenue, encourages employers to rely on overtime instead of hiring, and can be exploited by highly paid individuals, ultimately shifting the tax burden and potentially harming public services and future Social Security benefits. It's seen as a loophole that benefits a few while creating complex tax code issues and distorting labor markets, say experts from the Tax Foundation and the Center for Economic and Policy Research, as noted by the Tax Foundation. 

What is Trump's new tax plan?

April 10, 2025, the House adopted the Senate's amended version of the budget resolution, which allows $5.3 trillion in deficit-financed tax cuts (the combination of $3.8 trillion of tax cuts assumed to be “costless” under a current policy baseline plus $1.5 trillion in additional deficits permitted), deficit increases ...

Why did Trump revoke Executive Order 13770?

President Trump revoked Executive Order 13770 on his last day in office to lift the strict ethics rules, particularly the five-year lobbying ban, for his administration's officials, allowing them to become lobbyists sooner and fulfilling a pattern of presidential ethics orders being reversed by successors, including his own move from earlier in his term. The rescission, made via another Executive Order (EO 13983), removed restrictions like the ban on lobbying former agencies and activities related to the Foreign Agents Registration Act (FARA), enabling former appointees to immediately work as lobbyists. 

What would happen if Trump tax cuts expire?

If the individual tax cuts expire, taxpayers in all income groups would face higher and more complicated taxes. Machinery and equipment expensing is a key provision that, if allowed to expire, would especially harm capital-intensive industries like manufacturing.

Will Trump stop taxing overtime?

Yes. The no tax on overtime bill was included in the One Big Beautiful Bill that President Trump signed into law in July 2025. This new law creates a first-of-its-kind tax exemption for certain overtime pay, effective beginning in tax year 2025.

How will no tax on overtime work in 2026?

The IRS announced that Forms W-2, 1099-NEC, 1099-MISC, and 1099-K will be updated for the 2026 to 2028 tax years to include separate reporting of qualified overtime compensation. As a result, only overtime pay that's separately reported on these forms will be deductible beginning with the 2026 tax year.

Why am I getting taxed so much on overtime?

Your tax bracket is determined by your total annual income, which consists of both regular and overtime pay, and your filing status. There is no separate tax on overtime pay. If overtime pushes your income into a higher tax bracket, only the portion above the threshold will be taxed at a higher rate.

What is $80,000 a year hourly?

$80,000 a year is approximately $38.46 per hour, assuming a standard 40-hour workweek (2080 working hours per year), calculated by dividing your annual salary by 2080. This breaks down to about $1,538 weekly, $3,077 bi-weekly, or $6,667 monthly before taxes. 

Why is Target paying $24 an hour?

Target pays up to $24 an hour for some entry-level roles because of intense retail competition, labor shortages, and inflation, leading them to invest in higher wages and better benefits (like expanded healthcare) to attract and retain employees in competitive markets, rather than paying a universal $24 minimum. The rate varies by location and role, with the highest pay in high-cost, competitive areas, as part of a broader $300 million investment in their workforce announced in 2022. 

Is $20 an hour good in the USA?

In certain parts of the U.S., $20 per hour is a decent living wage compared to other areas. Knowing how to calculate your earnings by week, month and year is essential to budgeting your money and making intelligent financial decisions.

What is the new overtime rule 2025?

New overtime rules for 2025 involve a significant federal tax deduction under the "One Big Beautiful Bill (OBBBA)," allowing workers to deduct the "extra half" of their FLSA time-and-a-half pay (up to $12,500/$25,000) from federal income tax for tax years 2025-2028, requiring new employer reporting. Separately, the Department of Labor (DOL) raised the salary threshold for exempt employees to $58,656 annually effective January 1, 2025, with future automatic increases planned, impacting who qualifies for overtime exemptions. 

Can I legally say no to overtime?

Yes, it is illegal for employers in the U.S. to not pay overtime to non-exempt employees who work over 40 hours in a workweek, requiring at least 1.5 times their regular rate under the Fair Labor Standards Act (FLSA), with potential monetary penalties, lawsuits, or even criminal prosecution for violations, though state laws might offer even greater protections. 

What is OT for $20 an hour?

For $20 an hour, standard overtime (time-and-a-half) is $30 per hour ($20 x 1.5), paid for hours worked over 40 in a workweek, according to the Fair Labor Standards Act (FLSA). To calculate total pay, multiply regular hours by $20 and overtime hours by $30, then add them together.