House Passes Overtime Tax Deduction Bill

Legislation aims to provide tax relief for Alabamians working extra hours.

Apr. 2, 2026 at 1:16pm

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The Alabama House of Representatives has passed a bill that would allow residents to deduct taxes on a portion of their overtime wages. The legislation is intended to provide financial relief for workers in the state who are putting in extra hours on the job.

Why it matters

This bill reflects ongoing efforts by state lawmakers to address economic challenges faced by Alabama workers, including the rising cost of living and the need for more take-home pay. The proposed tax deduction could help offset the financial strain of overtime work for eligible employees.

The details

The bill would allow Alabamians to deduct a percentage of their overtime pay from their state income taxes. The specific deduction amount and eligibility criteria have not yet been finalized, as the legislation still needs to pass the state Senate and be signed into law by the governor.

  • The House of Representatives passed the bill on April 2, 2026.

The players

Alabama House of Representatives

The lower chamber of the Alabama state legislature, which is responsible for introducing and voting on new bills.

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What’s next

The bill now moves to the Alabama State Senate for consideration and a vote. If passed by the Senate, it would then go to the governor's desk to be signed into law.

The takeaway

This proposed tax deduction for overtime pay reflects an ongoing effort by Alabama lawmakers to provide economic relief and support for workers in the state who are putting in extra hours to make ends meet.