H.R. 4740

119th CONGRESS 1st Session

To amend the Internal Revenue Code of 1986 to allow a deduction for certain overtime compensation.

IN THE HOUSE OF REPRESENTATIVES · July 23, 2025 · Sponsor: Mrs. Sykes · Committee: Committee on Ways and Means

SEC. 1. Short title

(a) In general
- of the Internal Revenue Code of 1986 is amended to read as follows: Section 225(c)(1)
  - (1) In general
    - For purposes of this section, the term means— qualified overtime compensation
      - any overtime compensation paid to an individual required under section 7 of the Fair Labor Standards Act of 1938 that is in excess of the regular rate (as used in such section) at which such individual is employed, or
      - any compensation paid to an individual that is in excess of the regular rate at which such individual is employed if such compensation is paid—
        
        (i) at a rate of not less than one and one-half times such regular rate,
        
        (ii) for work for a single employer that is in excess of a standard number of hours of such work for a specified period of time, and
        
        (iii) as required by a collective bargaining agreement, or an agreement between such employer and employee, which—
        
        was entered into before the performance of the work, and
        
        specifies that such standard number of hours for a specified period of time is not less than 40 hours for a 7-day work period.
(b) Effective date
- The amendment made by this section shall apply to taxable years beginning after December 31, 2024.