Trump's overtime deduction has been a 'home run,' Treasury says. What it means for the tax break

Many Americans are seeing bigger tax refunds this season due to President Donald Trump’s 2025 legislation, which includes the new “no tax on overtime” deduction.

This season, that tax break has seen a surge of popularity, which could impact its future, experts say.

While the provision doesn’t eliminate taxes on overtime pay, it allows certain workers to deduct a portion of eligible compensation — up to $12,500 for single filers or $25,000 for married couples filing jointly per year — from 2025 through 2028.

Almost 50% of the tax returns filed this season have included one of Trump’s “signature campaign policies,” Treasury Secretary Scott Bessent said Sunday during a “Fox and Friends” interview.

These returns include Trump’s deductions for tip income, overtime earnings, seniors and auto loan interest, which are reported on the new Schedule 1-A for individual returns.