UPS Teamsters are ineligible for the new federal “No Tax on Overtime” deduction because of a legislative loophole.

The “One Big Beautiful Bill” promised a tax break on workers’ overtime earnings. But, for UPS Teamsters, there is a big catch.

The tax break only applies to overtime defined under the Fair Labor Standards Act (FLSA). Because we are involved in interstate commerce, UPS Teamsters are excluded from the tax break.  

This has nothing to do with our membership in a union or coverage by a union contract.

For more information, read this update from UPS Package Division.

No Tax on Overtime for All Workers Act

The Teamsters Union is pushing to close the loophole and make all workers eligible for the overtime tax exemption by working to pass H.R. 5475, the No Tax on Overtime for All Workers Act. 

Teamsters General President Sean M. O’Brien said "Expanding this policy to cover more Americans and more Teamsters — including those in the trucking, rail, and aviation industries — is common sense.”

More Loopholes

Even for eligible workers, the overtime tax deduction only applies to the portion of overtime pay that is above your normal rate of pay. 

Taxes still must be paid on two-thirds of overtime earnings that are paid at time-and-a-half. Taxes have to be paid on 75 percent of overtime earnings that are paid at double time.