(a) In general

Section 225(c)(1) of the Internal Revenue Code of 1986 is amended to read as follows:

(1) In general

For purposes of this section, the term qualified overtime compensation means—

(A)

any overtime compensation paid to an individual required under section 7 of the Fair Labor Standards Act of 1938 that is in excess of the regular rate (as used in such section) at which such individual is employed, or

(B)

any compensation paid to an individual that is in excess of the regular rate at which such individual is employed if—

(i)

such compensation is paid for work for a single employer pursuant to an agreement between the employee (or labor organization representing such employee) and employer entered into before the performance of the work, and

(ii)

either—

(I)

such work is in excess of a standard number of hours of such work for a specified period of time, and such agreement specifies that such standard number of hours for a specified period of time is not less than 40 hours for a 7-day work period, or

(II)

if the employee (including any crewmember or flight crewmember, or rail operating craft employee) and employer referred to in clause (i) are both covered by the Railway Labor Act, such work is beyond scheduled or anticipated hours on duty or for hours on duty that exceed a maximum number of hours with respect to a specified period of time (as determined pursuant to such agreement).

(b) Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2024.