No tax on overtime pay The break is capped at $12,500 for single filers or $25,000 for married couples filing jointly. This tax break phases out for higher earners. This is a tax break only for overtime pay, not all wages.
Did the no tax on overtime pass? 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.
President-elect Donald Trump campaigned on lowering the US corporate income tax rate to 15 percent. He made the same request in 2017 when Republicans passed their tax cuts, but Congress only cut the federal rate to 21 percent—down from the worldwide high of 35 percent.
The Congressional Budget Office (CBO) estimated in 2018 that the 2017 law would cost $1.9 trillion over ten years, and recent estimates show that making the law's temporary individual income and estate tax cuts permanent would cost roughly another $4.2 trillion through 2035.
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.
Quick Answer: $33.65 Per Hour
After federal and state deductions, your take-home pay ranges from $43,500 to $52,000 annually ($3,625-$4,333 monthly). Converting $70,000 a year to an hourly wage is straightforward: divide the annual salary by 2,080 work hours (40 hours per week × 52 weeks).
No Tax on Overtime is a provision that was included in a larger tax reform bill that passed in July 2025. It allows certain workers to deduct up to $12,500 in qualified overtime compensation from their taxable income on their federal income tax return. Joint filers can deduct up to $25,000.
The Big Ugly Law sets a new precedent for wealth transfers to the ultra-rich. In 2017, Trump and Republicans passed the so-called Tax Cuts and Jobs Act (TCJA), a historically bad bill which increased the deficit by $1.9 trillion .
The 2025 Federal Tax Debate
In July, Trump signed into law a tax and spending “megabill” that Congress rushed to pass. It featured huge tax cuts for wealthy Americans and little for the rest of the country. Much like the 2017 tax law, the new law favors the richest taxpayers.
TCJA made many large changes across multiple areas of the tax code, including most infamously reducing the corporate tax rate, increasing the standard deduction, and increasing the applicable exclusion amounts for estate taxes.
The One Big Beautiful Bill Act (OBBBA) or the Big Beautiful Bill (P.L. 119-21), is a U.S. federal statute passed by the 119th United States Congress containing tax and spending policies that form the core of President Donald Trump's second-term agenda. The bill was signed into law by Trump on July 4, 2025.
WASHINGTON — The wealthiest 1 percent of Americans are the nation's most egregious tax evaders, failing to pay as much as $163 billion in owed taxes per year, according to a Treasury Department report released on Wednesday.
The Tax Cuts and Jobs Act of 2017 was legislation passed by the 115th Congress and signed into law by President Donald Trump.
On July 4, 2024, President Trump signed the “Big Beautiful Bill,” which contains two provisions that provide federal income tax deductions on both tips and overtime compensation beginning January 1, 2025, through December 31, 2028.
No tax on overtime applies to overtime pay earned starting January 1, 2025, and continues through December 31, 2028, unless extended. To benefit, your employer must be able to separately report overtime earnings on your W-2.
Historic Working Families Tax Cuts
Delivered the largest tax cut in U.S. history for working families, permanently lowering tax rates and expanding relief even further with things like a boosted standard deduction, larger child tax credit, and no tax on tips, overtime work, and seniors social security income.
Living in states without income tax can significantly reduce an individual's overall tax burden, benefiting primarily high-income earners during tax season.
Multiple other analyses have found that higher debt and deficits lead to upward pressure on interest rates. Paying for the cost of extending and expanding tax cuts will directly lead to lower interest rates than extension without offsets. Lower interest rates mean lower borrowing costs throughout the economy.