It has been almost two months since the House passed a budget bill with no tax on overtime, but nothing can be done with the bill yet.
The House narrowly passed its spending bill on Feb. 25. President Donald Trump endorsed the agenda because it combined many of his campaign promises into one bill.
The House voted 217-215 in February to advance Trump’s legislative plan, with budget levels for 2026 through 2034. All Democrats and one Republican, Rep. Thomas Massie, R-Kentucky, voted against the budget plan. Now, we must wait for the Senate to approve the spending bill, which is separate from the one passed in mid-March to avoid a government shutdown.
Here’s what to know about when we can expect no overtime tax.
What is no tax on overtime?
The proposal for no overtime tax seeks to remove the federal income tax on overtime pay. Removing the tax would mean workers who log extra hours would not have to pay federal taxes on overtime earnings.
States with a state income tax, like Oklahoma, may still have the possibility of paying state income taxes on overtime.
What was included in the House spending bill?
The goals of the proposal are:
Allowing overtime pay to be exempt from income tax would let workers keep a larger portion of their earnings, potentially increasing their take-home pay and stimulating economic growth.
Removing taxes on tips would provide considerable advantages to service industry workers like restaurant staff, delivery drivers, and gig workers, who depend heavily on gratuities for a large portion of their income.
Eliminating taxes on Social Security benefits would give retirees more disposable income, potentially improving their quality of life and boosting local economic activity.
When does no tax on overtime start in Oklahoma?
No overtime on taxes and the other measures in the House budget bill will go into effect once it is signed into law. Before Trump can sign the bill, the Senate will have to reconcile and agree upon it.
If it is signed before the deadline, the bill will take effect when the new fiscal year begins on Oct. 1. However, we will not see any exemptions from federal income tax on paychecks until after the new year, as the bill pertains to budget levels for 2026 through 2034.
When will the Senate vote on House spending bill?
There’s no actual timeline for when the spending bill must be approved before the fiscal year begins.
The House of Representatives must pass all budget bills by June 30. However, Congress has no official deadline other than the Oct. 1 beginning of the fiscal year.
Both sides of legislation have deadlines throughout the year to progress through the budget, but only the House has a deadline for the final budget.
Once Congress and the House pass the budget bill, it will be sent to the president’s desk, where he has 10 days to sign it.
In the 119th Congress, there were 53 Republicans, 45 Democrats and 2 Independents in the U.S. Senate, and the GOP held a two-seat edge in the House of Representatives. Races later this year will fill seats vacated by Republicans Matt Gaetz and Michael Waltz, both of whom resigned to take appointments in the Trump administration, though Gaetz never assumed his role.
The Senate requires a 60-vote majority to pass the bill, meaning we may see a close voting margin, similar to the one in the House a month ago.
This article originally appeared on Oklahoman: When does ‘no tax on overtime’ start? Where the bill stands, what to know