Use our overtime tax calculator to estimate your qualified deduction and federal income tax savings for tax year 2025 or tax year 2026.
Your overtime isn’t
all tax-free.
2026. Estimated deduction $7,800. Federal tax savings $1,716.
For ordinary FLSA overtime, the qualified amount is the extra 0.5× regular rate. Even if your employer pays double time.
Understand qualified overtimeFederal income tax onlyState tax is excluded. Social Security and Medicare still apply.
Grounded in official guidanceQualified overtime is the premium required by FLSA Section 7. Higher contractual premiums don’t automatically qualify.
A little clarity, no commitmentEducational estimate, not tax advice. Check the IRS and U.S. DOL sources before filing.
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Maximum annual deduction for eligible non-joint filers.
A combined annual limit for a married couple filing jointly.
Income limits and federal overtime eligibility apply.
This no tax on overtime calculator estimates the qualified deduction and federal tax savings for tax year 2025 or tax year 2026. The deduction covers the FLSA-required premium, usually the extra half of your regular rate. Your full overtime paycheck does not become tax-free.
Start with who qualifies, then see what counts as qualified overtime.
For a typical eligible hourly worker, the qualified FLSA premium is the regular rate × overtime hours × 0.5. Double time increases gross pay, but not this qualifying premium.
Gross overtime pay = regular hourly rate × overtime hours per week × weeks × pay multiplierDouble time: gross pay vs. the qualified overtime premium
The annual limit is $12,500 for eligible non-joint filers or $25,000 for joint filers. The deduction phases out above MAGI of $150,000 or $300,000, respectively. MAGI is not necessarily your salary or take-home pay.
MAGI phaseout examples by filing status
A deduction reduces taxable income, not tax dollar for dollar. Savings can cross tax brackets; multiplying by one marginal rate is only a shortcut.
Use this federal income tax estimate to plan, then reconcile with your return. State tax, Social Security, Medicare, and credits are outside this estimate.
For tax year 2026 onward, employers report qualified overtime in W-2 box 12, code TT. Missing or understated amounts require an employer-issued W-2c before claiming the additional amount. If code TT is overstated, use no more than the actual qualified overtime received.
The separate tax year 2025 payroll-record transition methods do not carry over to tax year 2026.
W-2 box 12 code TT · Code TT missing: records and corrections · 2025 vs. 2026 overtime reporting requirements
Single filer; $60,000 of other income. Assume MAGI includes gross overtime and the full deduction falls within a 22% tax bracket. Hours and pay are shown below.
Joint return; one spouse earns this overtime; $200,000 of other household income. Assume the full deduction falls within a 22% tax bracket.
Plain answers to the things that can make overtime confusing.
No. Eligible taxpayers may deduct the FLSA-required premium, subject to limits. Regular pay and premiums above the federal requirement do not automatically qualify.
It estimates the deduction and its federal income tax effect. Your refund also depends on withholding, payments, credits, and the rest of your return.
Yes. Qualified overtime generally remains subject to the usual Social Security and Medicare taxes. The deduction does not remove these payroll taxes.
Yes. Eligible taxpayers can claim it with the standard deduction or when itemizing.
Under the usual federal weekly rule, only the required extra 0.5 × regular rate qualifies. The additional double-time premium does not automatically qualify.
No SSN is collected here. A valid SSN is required to claim the deduction on your tax return, not to use this calculator.
Rules last verified: . Includes tax year 2025 and tax year 2026 guidance for the calculator’s year selector. Read the calculation methodology.