The notion of eliminating taxes on extra time earnings underneath the Trump administration didn’t materialize as a concrete, universally utilized coverage. Whereas there have been discussions and proposals regarding tax reform, together with potential modifications to earnings tax constructions, a particular, enacted legislation eliminating federal taxes solely on extra time pay didn’t come into impact. Additional time pay continued to be topic to plain federal earnings tax and payroll taxes, like Social Safety and Medicare.
Issues concerning potential tax changes on earnings, together with extra time, had been typically framed inside broader financial objectives, reminiscent of stimulating financial development and incentivizing workforce participation. Arguments in favor of focused tax reduction on extra time may probably heart on boosting the take-home pay of hourly employees, encouraging productiveness, and assuaging monetary burdens on working households. Nevertheless, the absence of such a coverage meant that extra time compensation continued to be handled as common earnings for federal tax functions.