President Trump’s new affordability policy is beginning to soak into the system, leaving Democrats unsure what to do about it. In fact, some Democrats kinda … like it?
As part of the tax cuts in the One Big Beautiful Bill Act of 2025, Republicans carved out a provision allowing for tax deductions on overtime pay up to $25,000. According to new Treasury Department data, nearly 20 million Americans have already reaped its benefits this filing season, Politico reported Tuesday.
There are some caveats and restrictions, however.
The tax break applies only to specific kinds of compensation, and eligibility is limited to the additional “half” of time-and-a-half pay, even if an individual’s actual overtime rate was higher, Politico noted. Claims are also only permissible for weeks where total hours worked exceeded 40. Further, since the tax cuts were signed into law by Trump in 2025, businesses might struggle to retroactively calculate how much overtime pay is eligible for the deduction.
As Politico noted, the Treasury Department tried to remedy this problem by temporarily waiving a requirement for companies to report to workers how much of their income would be eligible, leaving some skeptics worried that workers using the deduction this year might not even be eligible.