No Tax on Overtime Act (H.R. 3118 IH)

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SEC. 225. DEDUCTION FOR QUALIFIED OVERTIME COMPENSATION

The following section is proposed to be inserted to Part VII of the Internal Revenue Code of 1986 (as amended by section [H.R. 3118 IH](https://www.govinfo.gov/app/details/BILLS-119hr3118ih)):

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1. The deduction provided in section 23.
2. the deduction provided in section 24;
3. the deduction provided in section 25; and
4. a new deduction for qualified overtime compensation as provided in section 225._DEF
5. The deduction under this subsection shall be allowed to an individual taxpayer for a taxable year if the taxpayer receives a payment of $20 or more from any source within such taxable year for qualified overtime compensation.
6. The term qualified overtime compensation means compensation paid to an employee as a result of participation in an overtime pay plan under which the employee is entitled to receive additional compensation for hours worked beyond 40 regular hours during any workweek, or compensation paid to an individual who is not an employee described in section 3121(a) of the Internal Revenue Code of 1986, and such payment is made by a corporation under section 561.
7. The term qualified overtime pay plan means a plan established under which an employer agrees to pay an additional amount per hour worked beyond 40 regular hours during any workweek to each employee participating in the plan.
8. The employee receives compensation that is considered to be wages with respect to the individual’s employment for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
9. the compensation is paid under a qualified overtime pay plan established by the employer.
10. The employee has paid taxes on all wages received with respect to which such compensation is provided; or
11. The employer has paid federal unemployment tax on such wages with respect to which such compensation is provided; and
12. such compensation is made available by the employer as required under section 3126(a) of the Internal Revenue Code of 1986.
13. The payment is not subject to federal income tax imposed under subpart E of part IV of the Internal Revenue Code of 1986 (relating to employment taxes); and
14. the amount of such compensation may be added to an employee’s basis for certain fringe benefits under section 127.
15. The payment is made after December 31, 2024; or
16. The employee has paid taxes on all wages received with respect to which such compensation is provided, and the amount of such compensation may be added to an employee’s basis for certain fringe benefits under section 127.
17. Such payment does not exceed $20 per hour beyond 40 regular hours of employment during a workweek.
18. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
19. the employee shall not be required to pay additional taxes or penalties on such amount.
20. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
21. the employee shall not be required to pay additional taxes or penalties on such amount.
22. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
23. the employee shall not be required to pay additional taxes or penalties on such amount.
24. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
25. the employee shall not be required to pay additional taxes or penalties on such amount.
26. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
27. the employee shall not be required to pay additional taxes or penalties on such amount.
28. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
29. the employee shall not be required to pay additional taxes or penalties on such amount.
30. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
31. the employee shall not be required to pay additional taxes or penalties on such amount.
32. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
33. the employee shall not be required to pay additional taxes or penalties on such amount.
34. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
35. the employee shall not be required to pay additional taxes or penalties on such amount.
36. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
37. the employee shall not be required to pay additional taxes or penalties on such amount.
38. The amount included in this subsection as paid under the qualified overtime compensation is treated as wages for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
39. the employee shall not be required to pay additional taxes or penalties on such amount.
40. The deduction under this subsection may not be claimed by an individual if the payment received is in excess of $20 per hour beyond 40 regular hours of employment during a workweek, and the employee has paid taxes on all wages received with respect to which such compensation is provided.
41. The Secretary shall prescribe regulations for determining whether an amount paid to an individual as qualified overtime compensation exceeds $20 per hour beyond 40 regular hours of employment during a workweek, and whether the employee has paid taxes on all wages received with respect to which such compensation is provided.
42. The Secretary shall also prescribe regulations for determining the amount of additional compensation that may be treated as an adjustment under section 127(b)(5) in order to account for the receipt of qualified overtime compensation, and
43. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
44. The Secretary shall also prescribe regulations for determining whether an individual has received a payment from an employer that is considered to be wages with respect to the individual’s employment for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
45. whether such payment was made under a qualified overtime pay plan established by the employer.
46. The deduction under this subsection shall not be claimed if the payment received is in excess of $20 per hour beyond 40 regular hours of employment during a workweek, and the individual has paid taxes on all wages received with respect to which such compensation is provided.
47. The Secretary shall prescribe regulations for determining whether an individual has paid additional taxes or penalties on qualified overtime compensation, and
48. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
49. The Secretary shall also prescribe regulations for determining the amount of additional compensation that may be treated as an adjustment under section 127(b)(5) in order to account for the receipt of qualified overtime compensation, and
50. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
51. The Secretary shall also prescribe regulations for determining whether an individual has received a payment from an employer that is considered to be wages with respect to the individual’s employment for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
52. whether such payment was made under a qualified overtime pay plan established by the employer.
53. The deduction under this subsection shall not be claimed if the payment received is in excess of $20 per hour beyond 40 regular hours of employment during a workweek, and the individual has paid taxes on all wages received with respect to which such compensation is provided.
54. The Secretary shall prescribe regulations for determining whether an individual has paid additional taxes or penalties on qualified overtime compensation, and
55. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
56. The Secretary shall also prescribe regulations for determining the amount of additional compensation that may be treated as an adjustment under section 127(b)(5) in order to account for the receipt of qualified overtime compensation, and
57. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
58. The Secretary shall also prescribe regulations for determining whether an individual has received a payment from an employer that is considered to be wages with respect to the individual’s employment for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
59. whether such payment was made under a qualified overtime pay plan established by the employer.
60. The deduction under this subsection shall not be claimed if the payment received is in excess of $20 per hour beyond 40 regular hours of employment during a workweek, and the individual has paid taxes on all wages received with respect to which such compensation is provided.
61. The Secretary shall prescribe regulations for determining whether an individual has paid additional taxes or penalties on qualified overtime compensation, and
62. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
63. The Secretary shall also prescribe regulations for determining the amount of additional compensation that may be treated as an adjustment under section 127(b)(5) in order to account for the receipt of qualified overtime compensation, and
64. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
65. The Secretary shall also prescribe regulations for determining whether an individual has received a payment from an employer that is considered to be wages with respect to the individual’s employment for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
66. whether such payment was made under a qualified overtime pay plan established by the employer.
67. The deduction under this subsection shall not be claimed if the payment received is in excess of $20 per hour beyond 40 regular hours of employment during a workweek, and the individual has paid taxes on all wages received with respect to which such compensation is provided.
68. The Secretary shall prescribe regulations for determining whether an individual has paid additional taxes or penalties on qualified overtime compensation, and
69. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
70. The Secretary shall also prescribe regulations for determining the amount of additional compensation that may be treated as an adjustment under section 127(b)(5) in order to account for the receipt of qualified overtime compensation, and
71. whether any amount included in this subsection as paid under the qualified overtime compensation is subject to tax imposed by subpart E of part IV of the Internal Revenue Code of 1986.
72. The Secretary shall also prescribe regulations for determining whether an individual has received a payment from an employer that is considered to be wages with respect to the individual’s employment for purposes of section 3121(a) of the Internal Revenue Code of 1986, and
73. whether such payment was made under a qualified overtime pay plan established by the employer.
74. The deduction under this subsection shall not be claimed if the payment received is in excess of $20 per hour beyond