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As of March 6, 2025, sentiment on tax exemption on overtime pay is shifting. A handful of states are stepping up to ease the burden on workers’ extra hours. Now, this is not a small number to be dismissed. According to BLS data, an estimated 34 million workers clock beyond 40 hours weekly. States with no tax on overtime pay are rare, but they’re making huge waves by leaning towards tax exemption on overtime pay. This offers a glimpse into a growing list of states with tax exemption on overtime policies either active or in th
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works. The current shift