'Huge political issue': Workers outraged as 'fine print' excludes them from Trump tax cut

31 July

US President Donald Trump tours the US Steel Corporation–Irvin Works in West Mifflin, Pennsylvania with company executives on Friday. (Photo: Reuters)

President Donald Trump's new massive tax and spending law is under fire after workers who put in significant overtime hours are discovering bureaucratic barriers locking them out of a provision meant for them.

The Wall Street Journal reported Thursday that "fine print" in the "no tax on overtime" section of Trump's law (which he ran on in 2024) excludes workers in many sectors that require lots of overtime work, like railroad workers. Because the Fair Labor Standards Act (FLSA) requires employers pay time-and-a-half for all hours over 40 per week, the new law makes that "half" tax-free. But because rail industry workers aren't covered under the FLSA, they won't qualify (rail workers' overtime hours are under the jurisdiction of the Railway Labor Act).

"It’s a legislative blunder and a political blunder," Transport Workers Union (TWU) international president John Samuelsen told the Journal. "This will become a huge political issue, particularly for the Republicans, if it’s not fixed."

Massachusetts-based TWU member Chris Comeau piled on, telling the Journal that he supported Trump specifically because of his "no tax on overtime" proposal. Comeau — who works between 20 and 30 hours of overtime each week cleaning commuter trains — said he hoped to save thousands of dollars in taxes each year, and was disappointed that he wouldn't qualify for the benefit.

"You don’t get more middle class than guys that are fixing trains and riding on trains and cleaners," Comeau said.

According to the Journal, Sen. Roger Marshall (R-Kan.) had submitted an earlier proposal for "no tax on overtime" to have a broader definition in order to include more workers from other sectors. However, the Senate ultimately decided to limit it to workers covered by the FLSA as it was a "known federal standard that could be implemented" and would lessen "revenue consequences." The American Association of Railroads is reportedly pushing Congress to amend the law to include rail workers.

The "no tax on overtime" provision is retroactive to the beginning of 2025, and is capped at $12,500 for individuals and $25,000 for couples filing jointly. The break is scaled back for single filers who earn more than $150,000 and married filers who earn more than $300,000. The Treasury Department aims to issue guidance to employers and workers on how to claim the deduction, though attorney Thomas Cryan told the Journal that he predicted "lots of gray areas" given the "constant litigation" over which workers will qualify for the tax break.

Click here to read the Journal's report in its entirety (subscription required).

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