No Tax on Overtime Explained | Promises Made, Promises Kept? | AMworldnews

⁣🇺🇸 *NO TAX ON OVERTIME — PROMISES MADE, PROMISES KEPT?*

*What does the new overtime tax law actually mean for working Americans?*

In this AMworldnews special report, Milton Rasiah explains the facts behind the White House announcement, using a simple example that anyone can understand.

The law, signed July 4, 2025, created a new federal income-tax deduction for qualifying overtime compensation.

*HOW DOES IT WORK?*

Imagine you earn $20 per hour.

Your regular hourly wage: $20
Your overtime rate (time-and-a-half): $30
Your additional overtime premium: $10

Under the new law, that extra $10 per qualifying overtime hour may be deducted from your federal taxable income.

If you work 100 qualifying overtime hours:

100 × $10 = *$1,000 in potential tax deductions.*

That does not mean you receive $1,000 back. It means your taxable income may be reduced by $1,000, which can lower the federal income tax you owe.

*HOW MUCH CAN YOU DEDUCT?*

The maximum annual deduction is:

• $12,500 for individual filers
• $25,000 for married couples filing jointly

The deduction begins to phase out when modified adjusted gross income exceeds:

• $150,000 for individual filers
• $300,000 for married couples filing jointly

*WHO QUALIFIES?*

The deduction generally applies to overtime compensation required under the federal Fair Labor Standards Act (FLSA). Not every employee or type of overtime payment qualifies.

You must have a valid Social Security number. Married taxpayers must file jointly to claim the deduction.

The deduction is available whether you take the standard deduction or itemize.

*WHAT TAXES STILL APPLY?*

This law does not eliminate all taxes on overtime.

Social Security and Medicare taxes generally still apply to the full overtime wages, including the extra premium. Federal income-tax withholding may also continue during the year.

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*WHEN DOES IT APPLY?*

The deduction applies to tax years 2025 through 2028 under current law.

*WHAT SHOULD WORKERS DO?*

Talk to your HR or payroll department about your overtime records and eligibility. Consult a qualified tax professional to understand how this deduction applies to your individual situation.

*OFFICIAL SOURCES*

IRS — What to Know About the No Tax on Overtime Deduction:
https://www.irs.gov/newsroom/what-to-...

IRS — Detailed Questions and Answers:
https://www.irs.gov/newsroom/question...

Original White House video:
https://www.whitehouse.gov/videos/no-...

*Milton Rasiah Reporting*
AMworldnews | AskMilton.tv Network

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