With less than two weeks before Tax Day, Treasury Secretary Scott Bessent has touted the uptake of the One Big Beautiful Bill Act’s big four tax breaks for individuals: “no tax on tips,” “no tax on overtime,” “no tax on car loan interest,” and the additional deduction for seniors (which really isn’t “no tax on Social Security”).
Sure, these provisions may be popular in March. But the real question is whether they’re popular this coming November—and again in November 2028. Will today’s big numbers hold over time? Reasons for both optimism and skepticism, below the fold.
According to Bessent, at least one of these four tax breaks was claimed on almost 50% of all filed returns through March 2026. The “home run” was the deduction for overtime pay, which was claimed on a whopping 25% of returns—nearly 20 million when Bessent presented his numbers. (The loser in this race is “no tax on car loan interest,” which has been claimed by just over 1% of filers but may rise as filing season continues.) For many, the results are in their pockets, with average refunds up by $350 (11%) from the same point in the 2025 filing season.
If these numbers reflect an OBBBA-driven “refund bonanza,” then voters may reward Republicans in this year’s midterm elections. The potential narrative is clear: the highly partisan OBBBA delivered catchphrase tax deductions that taxpayers claim affirmatively on their tax returns. There’s salience. Refunds are bigger. More salience. Then, in November, the OBBBA succeeds with voters in a way that the TCJA never did.
The story, however, isn’t over yet. The composition of tax returns varies predictably over filing season, and early filers—often lower-income and with less information to collate—seem more likely to claim one of the big four tax breaks. For this reason, these provisions’ prominence may prove short-lived as the annual surge of middle-income returns crests in mid-April. The big four also have income limits and phase-outs that will cull some claimants among this later group, as well as among the cohort of high-earners that file by the October extension deadline. Today’s eye-catching March numbers may overstate the ultimate reach of the OBBBA’s marquee individual provisions.
This dynamic, however, doesn’t clearly explain the early-season surge in claimants of “no tax on overtime.” Well under 15% of hourly workers generally receive overtime wages, along with less than 4% of salaried workers. In a given week, only about 10 million U.S. workers are paid overtime. And the Tax Policy Center estimated in July 2025 that only 9% of tax units would claim the deduction for overtime pay. Moreover, federal courts vacated the Department of Labor’s salary threshold that would have expanded the pool of overtime-eligible workers before the rule took effect in January 2026. In light of Conner-type households and the current affordability crisis, some returns may include two earners with overtime wages. All of these facts imply smaller total numbers of overtime deduction claimants—and a lower probability that March’s 25% uptake rate will persist through the end of the filing season.
But behavior changes may be buoying these numbers. Workers may have picked up more overtime once the deduction became available, and employers may have relabeled or more aggressively tracked pay practices at the margin. Salience and elasticity both may play a role. “No tax on overtime” draws broad popular support and bipartisan political support—the reductive intuition behind the provision has significant appeal. So workers know to seek tax-advantaged overtime, and, in 2025’s worker-favorable labor environment, they may have had the flexibility to do so. Overtime tax benefits—real or perceived—may have caused some workers to shift leisure time to tax-advantaged work after the OBBBA became law in July. Similarly, there may be some pragmatic slippage between the categories of regular and overtime wages, and the OBBBA put a thumb on the scale in favor of strict (or expansive) reporting in the latter category.
Finally, widespread misreporting—intentional or inadvertent—is possible. For the OBBBA’s overtime deduction, 2025 was a transition-year free-for-all. Starting in 2026, employers are required to separately state qualified overtime compensation on employees’ information returns. The sound-bite intuition behind “no tax on overtime” also doesn’t match onto the substantive law in terms of either eligibility or amount. For 2025, taxpayers are largely left to their tax preparation software and the whims of administrative simplexity. The result may be a filing season in which salience, self-calculation, and generous assumptions combine to push claim rates above what a more mature reporting regime will sustain.
What’s the bottom line? Observers should clearly delineate transition effects from steady-state expectations. This filing season may represent a one-time bump in the overtime deduction’s claimants, with a lower run-rate baseline in 2026 through 2028—once things settle, and before the provision sunsets. If the provision’s purpose is political and midterm-targeted, then the deduction might look okay. Due to transition effects, there’s less long-term (public) spending for a one-time (partisan) political benefit. Logs will roll and horses will trade, and the real task is to contain these practices’ negative policy effects.
March filing season numbers are not long-run figures. We’ll have to wait for a real evaluation of the effects of “no tax on overtime” on equity, efficiency, and administrability. Whether the provision’s good policy—macro and micro—remains an open question. In the meantime, we should keep in mind the contingencies and temporal texture associated with the OBBBA’s big four individual tax breaks—and watch how these provisions evolve on the ground in a dynamic economic and political environment.
