President Donald Trump’s signature tax-and-spending law, which was enacted in July 2025, added a new deduction for qualified overtime compensation. IRS Notice 2025-69 clarified for individuals how to determine the amount of their deduction for qualified overtime compensation for the 2025 tax year. The so-called “no tax on overtime” provision is available to certain individuals who are paid overtime compensation under Section 7 of the Fair Labor Standards Act. The deduction for qualified overtime compensation is an income tax deduction available to certain individuals who are paid qualified overtime compensation required under section 7 of the Fair Labor Standards Act (FLSA) (29 USC § 207). The deduction for qualified overtime compensation does not mean that overtime compensation is excluded or exempt from gross income.