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HR 4845 IH

To amend the Internal Revenue Code of 1986 to exclude overtime pay from gross income.

December 19, 2007

Ms. FALLIN (for herself, Mrs. BLACKBURN, Mr. POE, Mrs. BACHMANN, Mr. WALBERG, Mr. REYNOLDS, Mr. CARTER, Mr. BURGESS, Mr. FRANKS of Arizona, Ms. FOXX, Mr. PRICE of Georgia, and Mr. COLE of Oklahoma) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to exclude overtime pay from gross income.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. EXCLUSION OF OVERTIME PAY FROM GROSS INCOME.

(a) In General- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139A the following new section:

`SEC. 139B. OVERTIME PAY.

`(a) In General- Gross income shall not include any compensation required to be paid under section 7(a) of the Fair Labor Standards Act of 1938 for work in excess of the maximum hours set forth in such section.

`(b) Exception for Collective Bargaining Agreements- Subsection (a) shall not apply to any compensation received pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers.

`(c) Treatment as Wages for Employment Taxes, etc- Compensation described in subsection (a) shall not fail to be treated as wages for purposes of this title merely because such compensation is excludible from gross income under subsection (a).'.

(b) Clerical Amendment- The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139A the following new item:

`Sec. 139B. Overtime pay.'.

(c) Effective Date- The amendments made by this section shall apply to amounts received after December 31, 2007.