Payroll Tax Deduction Act

Payroll Tax Deduction Act - Amends the Internal Revenue Code to allow an individual a deduction in arriving at adjusted gross income for the old-age, survivors, and disability insurance (OASDI) taxes paid by the individual as an employee during the taxable year. Includes in such deduction: (1) the portion of the tier 1 railroad retirement tax paid equivalent to OASDI taxes; as well as (2) amounts equivalent to such taxes imposed with respect to remuneration covered by a voluntary agreement under the Social Security Act for coverage of State and local government employees, or a specified kind of agreement entered into by American employers with respect to foreign affiliates.

Allows a self-employed individual to deduct, in arriving at adjusted gross income, all OASDI taxes paid and half the hospital insurance taxes paid.