The query concerns the effective date of a hypothetical policy under a former administration that would have eliminated taxes on overtime pay. It’s important to clarify that, to date, no such broad federal law eliminating taxes on overtime pay was enacted during the Trump administration. Discussions and proposals existed, but none were ultimately codified into law at the federal level.
While broad elimination of taxes on overtime didn’t occur, understanding the context is useful. Overtime pay, typically mandated for certain employees working over 40 hours a week, is generally subject to standard federal, state, and local income taxes, as well as payroll taxes like Social Security and Medicare. Proposals to change this have been debated over the years, often with the aim of incentivizing work or providing tax relief to the middle class.
