You know what we need more of in these unprecedented times? More jokes. 🤹 And we can start by referring to Trump’s big, beautiful bill as America’s BBL. 🍑 In the words of Sir Mix-a-Lot, we’re hooked and we can’t stop starin’.
Anyway, if you’ve been jazzed about the bill’s promise to nix taxes on OT, don’t get too excited. After the Senate’s redlines, reality could be a different story. 📖
Here’s Five Fast Facts on Senate updates to the proposed bill:
- 👷🏽♂️ The Over Under- In the House version of the bill, income tax on overtime pay for more than 80 million hourly workers would be zeroed out via tax break. This would mean a temporary full deduction of qualified overtime pay received, ending after 2027.
- ✂️ Cutting Floor - However, after the Senate snatched it up for their pass, some limits were put in place. Under the latest version of the bill, OT pay would only be deductible up to $12,500 (or $25,000 for those filing jointly). Taxes on car loan interest and tips would get a cap, too.
- 🤼 Taking Sides - Republicans are eager to pass the bill while Democrats stay united in opposing it. One of the main goals of the package is to extend over $4T in tax breaks approved during Trump’s first term. With no action from Congress, the breaks will expire. The bill also includes over a trillion dollars in program cuts.
- ☑️ Checking Boxes - In order for OT pay to count towards the tax break, it has to be “qualified” and this varies from industry to industry. Depending on your job, the amount of hours you have to work per week to get OT could be more or less than someone in a different gig. Critics say the tax exemption could incentivize employees to work more hours, causing employers to be more strict around OT qualifications.
- 📉 Seeing Red - Another big criticism of the bill: how much it would tack on to U.S. debt. It’s estimated the bill would set the country back another $2.4T over the next 10 years. It could also cut health insurance for an estimated 10.9 million.
🔥Bottom line: If this BBL is really deflating, who knows what other changes will take shape before the bill passes. In the meantime, we’ll opt for natural padding AKA putting more cash away in our SOS fund. Is the U.S. labor market as strong as they say? In this article, we unpack some recent stats.
How much overtime do you work per week?
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