OBBBA Calc

No Tax on Overtime Calculator

Only the premium part of overtime pay is deductible: the extra half in time and a half, not the whole amount. Pick the mode that matches what you have, your hourly rate, a paystub total, or the code TT figure from your W-2. US federal, tax years 2025 to 2028.

Use the pair of fields that matches the mode you picked. Only the deductible premium counts, never the whole overtime pay.

Your overtime deduction estimate

Qualified overtime premium-
Estimated deduction-

How the overtime deduction is calculated

Qualified overtime premium = overtime hours × one half × your regular rate. From a paystub total paid at time and a half, the premium is the total divided by 3; at double time, the qualifying part is the total divided by 4. The premium is then capped at $12,500 ($25,000 on a joint return) and reduced by $100 for every full $1,000 of MAGI over $150,000 ($300,000 joint), following Schedule 1-A, Part III. Only overtime required by the Fair Labor Standards Act counts; extra pay required only by state law, a union contract or your employer's own policy does not. Sources: IRS FS-2026-13 (overtime FAQs, PDF) and Schedule 1-A (Form 1040, PDF).

Worked examples

The canary case

$30 an hour, 200 overtime hours at time and a half.

Premium $3,000, deduction $3,000 (the full OT pay is $9,000, and only the premium counts)

Phase-out example

Premium at the $12,500 cap, single, MAGI $165,000.

Reduction 15 x $100 = $1,500, deduction $11,000

Double time paystub

Paystub shows $12,000 of double-time overtime pay.

Qualifying premium $12,000 / 4 = $3,000

Frequently asked questions

Is all of my overtime pay tax free now?
No. Only the premium over your regular rate is deductible: the half in time and a half. Your base pay for those hours is taxed as normal.
My paystub does not show the premium separately. What do I do?
Use paystub mode. If the stub total was paid at time and a half, the premium is the total divided by 3. If a separate premium line is printed, use that figure in W-2 mode or check it against your code TT amount.
Does overtime required by my state or union contract count?
No. The deduction covers only the premium the Fair Labor Standards Act requires. Overtime your employer pays beyond that, or under state law or a contract, does not qualify beyond the FLSA-required amount.
What if my W-2 has no code TT amount?
For 2026 onwards, only the amount reported in Box 12 code TT can be claimed, so ask your employer for a corrected W-2c. The reconciliation tool on this site walks through each case.

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Disclaimer: Estimate only. US federal deductions, tax years 2025 to 2028. This calculator is not tax advice.

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