CLEVELAND, OH — More than 1.2 million Ohio taxpayers have already claimed a new federal overtime tax deduction worth roughly $3.4 billion, according to federal officials promoting a broader package of tax breaks aimed at workers, seniors, and buyers of American-made vehicles.
What This Means for You
- Ohio workers claiming overtime pay may qualify for a federal tax deduction through 2028.
- Seniors age 65 and older can receive an additional deduction of up to $6,000 per person.
- Buyers of certain new vehicles assembled in the United States may deduct up to $10,000 in car loan interest.
Internal Revenue Service CEO Frank J. Bisignano and Senator Bernie Moreno toured the Cleveland area on Friday to highlight provisions included in the federal Working Families Tax Cuts Act. The visits focused on tax deductions tied to overtime pay, auto loan interest, and older Americans.
“It’s rewarding to visit Ohio and see first-hand how President Trump’s Working Families Tax Cuts are ensuring American families and taxpayers are keeping more of their hard-earned paychecks,” Bisignano said. “Families in Ohio and the rest of the country are benefiting from the law, including the provisions that make it easier to afford a vehicle assembled in the United States, and reduce the tax burden on our great senior citizens and on those working overtime.”
Auto Loan Deduction Targets U.S.-Built Vehicles
At the Ford Engine Plant in Brook Park, Bisignano and Moreno met with plant leadership, workers, and auto dealers to discuss how the tax changes could affect domestic manufacturing and vehicle affordability.
One provision allows taxpayers to deduct up to $10,000 in interest paid on loans used to purchase qualifying vehicles assembled in the United States after December 31, 2024.
A tax deduction lowers the amount of income subject to taxation, potentially reducing the total taxes owed.
According to federal officials, approximately 54,000 Ohio taxpayers had already claimed the car loan interest deduction as of mid-May, totaling about $88 million. Nationwide, more than 1.4 million filers claimed roughly $2.6 billion under the provision.
Moreno said the deduction was designed to help consumers afford American-made vehicles.
“Thanks to the Working Families Tax Cuts, Ohioans received more of their hard-earned dollars back in their pockets,” Moreno said. “I am proud to have spearheaded the auto loan interest tax deduction to allow hardworking Ohioans to afford American-made vehicles.”
Seniors Receive Expanded Deduction
The officials also visited a Social Security Administration office in Middleburg Heights to discuss the law’s expanded deduction for older taxpayers.
Under the measure, individuals age 65 or older can claim an additional $6,000 deduction on top of the standard deduction. Married couples with two qualifying spouses may receive a combined additional deduction of $12,000.
To qualify, taxpayers must include Social Security numbers on their returns and married couples must file jointly.
Federal officials said roughly 1.4 million Ohio seniors claimed the deduction, with total deductions nearing $7.9 billion. Nationally, more than 35 million seniors claimed over $193 billion through the provision.
Overtime Deduction Available Through 2028
The law also created a temporary deduction for certain overtime earnings between tax years 2025 and 2028.
Under the provision, workers may deduct the portion of overtime pay exceeding their normal hourly rate — generally the additional “half” portion included in standard time-and-a-half compensation. Eligible earnings must be reported on a Form W-2 or Form 1099.
The maximum annual deduction is $12,500 per individual.
Federal officials said about 29.4 million taxpayers nationwide have already claimed nearly $92.7 billion through the overtime deduction program.
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