House Bill No. by Representative Bayham proposes to enact a new income tax deduction for resident individual taxpayers who receive overtime compensation. The bill defines "overtime compensation" as payments required under the Fair Labor Standards Act for hours worked beyond 40 in a workweek. The deduction will be limited to the amount of overtime compensation that does not exceed 20% of the taxpayer's other wages from the same employer during the taxable year.

Eligibility for this deduction is restricted to taxpayers whose adjusted gross incomes fall below certain thresholds based on their filing status: $200,000 for married couples filing jointly or surviving spouses, $150,000 for heads of household, and $100,000 for single filers or those married filing separately. The provisions of this bill will apply to taxable periods beginning on or after January 1, 2026, and the law will take effect on the same date.