Trump's "No Tax on Overtime" Promise: Another Broken Clock?
So, Trump's "One Big Beautiful Bill" – or OBBBA, because who has time to say all that – was supposed to liberate us from the tyranny of... overtime tax? Give me a break. It's classic Trump: big promises, shiny wrapping, and a whole lotta nothing burger inside.
The idea was simple enough: no federal income tax on overtime payments, up to $12,500 for singles and $25,000 for married couples. Sounds great, right? I mean, who wouldn't want a little extra cash in their pocket? But here's the catch – and there's always a catch. This "no tax on overtime" ain't exactly what it seems.
The Fine Print Bites Back
Turns out, it's a deduction, not a full exemption. So, you're still paying taxes on that overtime, just slightly less. And only the premium portion qualifies – that extra bump in your hourly rate. Voluntary overtime? Non-FLSA overtime? Forget about it.
But the real kicker? States are jumping ship faster than rats from a sinking yacht. Washington, New York, Illinois, Colorado... they're all saying "thanks, but no thanks" to Trump's tax break. Why? Because protecting their own state budgets is apparently more important than giving workers a measly few extra bucks. States aren't required to conform with all federal tax provisions.
Washington D.C., for example, voted to temporarily suspend a whole bunch of tax breaks from OBBBA, including the no tax on tips and overtime. "Temporarily." Yeah, right.
States Rebel, Confusion Reigns
So, let me get this straight. The feds offer a tax break, then the states claw it back? What a freakin' mess. It's like giving someone a gift card and then charging them a fee to use it.
And the IRS? They're basically shrugging their shoulders. They won't penalize employers for messing up the reporting requirements for 2025. IRS Will Not Impose Penalties Based on Reporting of “No Tax on Tips” and “No Tax on Overtime” for 2025. They're "encouraging" employers to provide info to employees, but no penalties if they don't. Offcourse, this only adds to the confusion. How are people supposed to figure out their taxes when the rules keep changing and nobody seems to know what's going on?
I mean, seriously, what kind of system is this? Is it any wonder people are losing faith in government?
It's like that old saying about the road to hell being paved with good intentions. This whole "no tax on overtime 2025" thing started out as a populist promise, but it's devolved into a bureaucratic nightmare.
Who Benefits? (Hint: Not You)
Who actually benefits from this? Not the workers, who are still getting taxed. Not the states, who are scrambling to balance their budgets. Probably just the tax accountants, who are gonna be swimming in paperwork trying to figure out all the different state and federal rules.
And don't even get me started on the "no tax on tips" part. That's a whole other can of worms.
So, What's the Real Story?
It's another example of politicians making big promises they can't keep – or don't want to keep. Trump's "no tax on overtime bill" was a PR stunt, plain and simple. It was designed to win votes, not to actually help working people. And as usual, we're the ones who end up paying the price.