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A 8965

Subtracts from federal adjusted gross income any overtime compensation earned by an individual

2025 Regular Session Introduced by Joe DeStefano

Bill A 8965 allows workers to exclude overtime pay from their federal adjusted gross income, reducing their tax burden and boosting disposable income.

REFERRED TO WAYS AND MEANS
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WeVote Research Nonpartisan
Bill Summary · A 8965

Summary of Bill A 8965

Bill Information

  • Bill Number: A 8965
  • Title: Subtracts from federal adjusted gross income any overtime compensation earned by an individual
  • Status: Referred to Ways and Means
  • Introduced: August 13, 2025
  • Classification: Bill
  • Related Bills: S 3914 (companion)

Purpose and Intent

Bill A 8965 aims to provide tax relief to individuals by allowing them to subtract any overtime compensation earned from their federal adjusted gross income (AGI). The intent behind this legislation is to alleviate the tax burden on workers who earn overtime pay, thereby encouraging fair compensation for additional work hours and supporting the financial well-being of employees.

Key Provisions

  • Overtime Compensation Exemption: The bill proposes that any overtime compensation earned by an individual will not be included in the calculation of their federal adjusted gross income. This means that individuals will effectively pay taxes only on their base salary, excluding any additional earnings from overtime work.

Impact

  • Affected Individuals: The primary beneficiaries of this bill would be employees who regularly receive overtime pay. This includes workers in various sectors, particularly those in industries where overtime is common, such as healthcare, manufacturing, and retail.

  • Tax Implications: By excluding overtime from AGI, individuals may see a reduction in their overall tax liability. This could lead to increased disposable income for workers, potentially stimulating local economies as individuals have more funds to spend.

Procedural Aspects

  • Legislative Process: As of August 13, 2025, the bill has been referred to the Ways and Means Committee for further consideration. This committee is responsible for reviewing tax-related legislation, which is a critical step in the legislative process before the bill can be debated and voted on by the full legislative body.

Conclusion

Bill A 8965 represents a significant potential change in how overtime compensation is treated for tax purposes. By allowing individuals to subtract overtime earnings from their federal adjusted gross income, the bill seeks to provide financial relief to workers and promote fair compensation practices. The bill is currently under review by the Ways and Means Committee, and its progress will be closely monitored by stakeholders and advocates for workers' rights.

Compiled from official sources — confirm details with the bill’s official record.

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