No Tax on Overtime Deduction Calculator
Estimate your qualified overtime deduction for 2025–2028.
Employers report it from 2026 (W-2 box 12, code TT)
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How the overtime deduction works
- Deduct up to $12,500 of qualified overtime ($25,000 on a joint return) for tax years 2025–2028.
- The limit shrinks by $100 for each $1,000 of modified AGI over $150,000 ($300,000 joint).
- Only the premium part of FLSA overtime counts — if you earn time-and-a-half, it's the extra half.
- You claim it on Schedule 1-A whether or not you itemize. Married filing separately doesn't qualify.
Frequently asked questions
Is all my overtime tax-free?
No. It's a capped deduction, only the premium portion counts, and Social Security and Medicare taxes still apply.
Do I need to itemize?
No. The deduction is available whether you take the standard deduction or itemize.
Sources
- IRS: Understanding your IRS notice or letter
- IRS: Get Transcript
- IRS: 2026 standard mileage rates
- IRS: No Tax on Overtime
Written by the editorial team and checked against the official sources above. See our editorial policy.
Last reviewed 2026-11-12. Estimates only — confirm with the IRS or a tax professional.