What's Happening?
A study by Policy Matters Ohio has found that the 'no tax on overtime' benefit included in a federal budget bill signed by President Trump will not significantly benefit most Ohio workers. The provision allows employees to deduct qualified overtime compensation
from federally taxable income, but it primarily benefits higher-income households. Only about nine percent of Ohio workers are expected to see a tax decrease, with the largest benefits going to those earning between $100,000 and $500,000 annually. The deduction is set to expire in 2028.
Why It's Important?
The findings highlight the limitations of the 'no tax on overtime' benefit in addressing income inequality and providing relief to lower-income workers. While the provision was intended to reduce the tax burden on overtime earnings, its impact is skewed towards higher-income households. This raises questions about the effectiveness of such tax policies in achieving equitable economic outcomes. As taxpayers prepare to file their returns, the study underscores the need for more targeted measures to support working-class families.
