4 Types of Workers Could Save Big Under Trump’s Overtime Tax Break
Written by
Andrew Lisa
Edited by
Levi Leidy
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President Donald Trump’s signature One Big Beautiful Bill Act (OBBBA) includes a provision that allows employees who work more than 40 hours per week to deduct a portion of their overtime pay from their taxable income.
The 1938 Fair Labor Standards Act (FLSA) guarantees pay of at least 1.5 times a worker’s regular wages for every hour worked over 40 in a given seven-day period. Traditionally, time-and-a-half pay has been subject to federal income taxes, including those that fund Medicare and Social Security. However, from 2025 through 2028, eligible taxpayers can deduct up to $12,500 in overtime pay, or $25,000 for joint filers, without itemizing, provided they earn less than $150,000, at which point the deduction begins to phase out.
However, the FLSA and its numerous subsequent updates have carved out exceptions for executives, administrative and professional employees, those in certain computer and sales occupations and others who are exempt from overtime pay protection.
Therefore, many Americans won’t benefit from the new rule. This article profiles those who likely will.
Nurses
According to the Lore Law Firm, at least 18 states have laws regulating mandatory overtime for nurses. In much of the country, however, these crucial healthcare workers are often required to work more than 40 hours per week, whether they want to or not, to compensate for persistent staffing shortages.
As early as 2004, the CDC was reporting on the heavy toll that mandatory overtime was taking on nurses and their patients, citing fatigue, burnout, diminished work performance and increased error rates due to long hours of stressful work. Roughly 20 years later, ShiftMed reported that little had changed.
The OBBBA stands to give millions of nonexempt nurses a break — on their taxes, at least, if not at their workplaces.
Law Enforcement
Like nurses, law enforcement officers play a crucial role in society that often requires them to work overtime. Also like nurses, many seek extra hours voluntarily, but often don’t have a choice.
According to the Bureau of Labor Statistics (BLS) Occupational Outlook Handbook page for police and detectives, “Paid overtime is common, and shift work is necessary to protect the public at all times.”
Tradespeople
Overtime is common in many trades occupations. Like police officers and nurses, the nature of their work often makes extra hours an unavoidable part of the job. The following are some of the many circumstances that can keep them working beyond 40 hours per week.
- Emergency repairs
- Installations with tight deadlines
- Frequent calls after regular business hours
- Spikes in demand during extreme weather events
The tradespeople most likely to work overtime — and therefore benefit from the new OBBBA provisions — are:
- Welders
- Plumbers
- Electricians
- Construction workers
- HVAC techs
Manufacturing Employees
According to the BLS, the average manufacturing employee works between 3.6 and 3.7 hours of overtime per week, or roughly 14.6 hours of time-and-a-half pay per month. That’s nearly 190 overtime hours per year — much of which will now be tax-deductible.
In fact, reliance on overtime is so common in the sector that the industrial staffing firm Traba wrote a report with striking similarities to the ShiftMed report on the nursing crisis. Chronic understaffing as high as 34% in some industries forces manufacturing companies to pay staggering levels of overtime compensation, with some employees racking up 500 overtime hours per year or more. Similarly to nursing, the result is often burnout, diminished performance and preventable accidents, often to the most seasoned and reliable employees.
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