No tax on overtime work: U.S. House Republicans back Trump’s tax plan

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May 14, 2025

The Republicans in the U.S. House Ways and Means Committee are including one of President Donald Trump’s major priorities in their budget and tax bill released on Monday; no taxes on overtime pay.

The 389 page “One Big, Beautiful Bill” includes the tax cut, with provisions saying the deductions would expire at the end of 2028.

“We are going to do NO TAX ON TIPS, NO TAX ON SENIORS’ SOCIAL SECURITY, NO TAX ON OVERTIME, and much more,” Trump said on Truth Social. “It will be the biggest Tax Cut for Middle and Working Class Americans by far, and it is time for Main Street to WIN.”

The idea got a strong endorsement from U.S. Sen. Tommy Tuberville (R-Auburn) who introduced a bill in the Senate that would include a deduction for taxes on overtime pay.

“President Trump campaigned and won on a promise to cut taxes for millions of Americans working overtime—and we are delivering on that promise,” Tuberville said. “Thousands of Alabamians put in way more than 40 hours a week in order to save for retirement, put their kids through college, and keep the trains running. They should not be punished with higher taxes for working longer hours.”

Despite support for the idea in Washington D.C., lawmakers in Montgomery went the other director this year, letting a state income tax cut on overtime pay expire.

Alabama Speaker of the House Nathaniel Ledbetter discussed why they decided not to extend the cut during a recent appearance on Alabama Public Television’s “Capitol Journal.”

“It’s not easy, and the prime example is the overtime tax,” Ledbetter said. “It’s something that I supported. I thought it was a good bill. You know, the fiscal note we got was $30 million. Well, it wound up, it is going to be like $320 million. What people have got to understand is that $320 million comes out of the classroom. It comes away from students, teachers and schools across the state. We’ve got schools in our state that are in desperate repair as far as construction or the building. So, that money could be spent for a new classroom or it could be spent to update the classroom or tear down some of these old classrooms in rural Alabama.”

Lawmakers decided instead to the state’s share of the so-called grocery tax from 3% to 2%, which goes into effect September 1, 2025.

Yaffee is a contributing writer to Yellowhammer News and hosts “The Yaffee Program” weekdays 9-11 a.m. on WVNN. You can follow him on X @Yaffee

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