WASHINGTON, D.C. – Police officers, factory line workers, and other hourly wage earners are rewarded for their hard work thanks to the Working Families Tax Cuts delivering on President Trump’s promise of “No Tax on Overtime.” Hourly workers can deduct up to $12,500, or $25,000 for married couples, of overtime premium payments for those earning up to $150,000, or $300,000 for married couples. The provision boosts income for the over 80 million hourly workers by up to $1,400. 

Ways and Means Committee Chairman Jason Smith (MO-08) said: 

“President Trump’s promise to help working families resonated with so many Americans exactly because it speaks to the core of our values as a nation. No Tax on Overtime is commonsense policy that rewards Americans who stay late, work hard and keep America running by helping them afford to take care of themselves and their families. Because of this provision, more than $600 billion in new tax relief goes to middle-class households, with the largest proportional tax benefits going to workers and families making less than $50,000. This is on top of the massive tax relief provided by extending the 2017 Trump tax cuts. There’s no doubt about it; this is a tax cut for the working class.” 

During a Ways and Means Committee hearing in Las Vegas, Nevada, held mere days after enactment of the Working Families Tax Cuts, Eric Byington, a Nevada paint foreman, said: 

“I wake up at 4 AM to come to this job that I love for this beautiful company. These are the things that make it worthwhile. This is actually a change for the working-class Americans. It’s the incentive. That’s what this country has been about since day one. The harder you work, the more you’re rewarded, and that’s what this bill does. You work overtime. You’re working hard; you’re staying late. Now you’re rewarded. You’re working weekends. You’re rewarded….” 

At the same hearing, Austin Robinson, a Nevada manufacturer, noted how the new overtime provision builds on the success of the 2017 tax cuts: 

“Looking back to what happened in 2017, 2018 there was probably one of the largest growth of wages in the middle class in probably recent years. During that time, it generated a lot of people changing jobs, looking for more wages or benefits to improve their position financially. Currently with us, with the no tax on overtime, it’s going to encourage more people to move into the manufacturing sector for better pay and better wages, but then also the overtime.” 

How No Tax on Overtime Works: 

• This is a brand new deduction for workers who keep America running. Individuals can deduct qualified overtime compensation that is reported on income tax forms W-2, 1099, or another statement provided by the employer. 
• The deduction is available for taxpayers whether they itemize or claim the standard deduction – meaning that people can benefit from this deduction in addition to the newly increased standard deduction, which about 90 percent of taxpayers claim. 

How the Working Families Tax Cuts Deliver for Working-Class Americans: 

• No tax on tips provides an average $1,300 tax cut. 
• No tax on overtime delivers an average $1,400 tax cut. 
• The standard deduction is increased by $1,500 per family to $31,500. 
• Married seniors will get a $12,000 deduction for their Social Security benefits. 
• The Child Tax Credit expands to $2,200 and is permanently indexed for inflation, so the credit never loses value. 
• Raises annual real wages by $7,200 per worker. 
• Increases annual take-home pay for a typical family with two children by $10,900. 
• Family of four with two children earning $73,000 has zero federal income tax liability.