Keep Every Extra Penny Act of 2025

# Keep Every Extra Penny Act of 2025 – Plain Language Summary **What the Bill Would Do** This bill would allow workers to exclude overtime pay from their federal income taxes. Currently, when workers earn overtime compensation (pay for hours worked beyond 40 per week), that money counts as taxable income. If passed, overtime pay would no longer be taxed at the federal level, potentially resulting in tax savings for workers who work extra hours. **Who It Affects** The bill primarily affects hourly workers and salaried employees who regularly work overtime.

Workers in industries with frequent overtime—such as manufacturing, healthcare, construction, and transportation—would likely benefit the most. The bill would also affect federal tax revenue, since the government would collect less income tax overall. **Current Status** The bill (HR 405) was introduced in the 119th Congress by Representative Russ Fulcher (R-ID) and is currently in committee, meaning it has not yet been debated or voted on by the full House of Representatives. It remains in the early stages of the legislative process.