No Tax on Overtime Calculator
Estimate your No Tax on Overtime deduction for 2025 or 2026. The calculator finds the qualified part of your overtime pay (the FLSA premium), then applies the $12,500 cap ($25,000 joint) and the income phase-out the way Schedule 1-A does. It's an estimate, not tax advice.
Estimated federal tax saved
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- Qualified overtime (FLSA premium)
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- Deduction after cap and income limit
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- Marginal rate
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How the No Tax on Overtime deduction is calculated
1. Find the premium. Only the extra pay the FLSA requires for hours over 40 in a workweek qualifies. At time-and-a-half that's one-third of your total overtime pay; at double time it's one-quarter. The IRS examples: $15,000 of time-and-a-half pay gives $5,000 of qualified overtime, and $20,000 of double-time pay also gives $5,000.
2. Apply the cap. Schedule 1-A line 15 limits it to $12,500, or $25,000 on a joint return.
3. Apply the phase-out. Lines 16–21 subtract $150,000 ($300,000 joint) from your MAGI, divide by $1,000, round down, and multiply by $100. That amount comes off the deduction.
4. Claim it. The deduction goes on Schedule 1-A, Part III, and flows to Form 1040 with your other new deductions. It's available for tax years 2025 through 2028, whether or not you itemize. Starting with 2026, your W-2 shows the qualified amount in Box 12 with code TT; see our W-2 Box 12 codes guide.
No Tax on Overtime: common questions
How does No Tax on Overtime work?
For tax years 2025 through 2028, you can deduct qualified overtime compensation on Schedule 1-A, Part III, whether you itemize or take the standard deduction. It lowers federal income tax only; Social Security and Medicare tax still apply to all overtime pay.
What counts as qualified overtime?
Only the overtime premium the Fair Labor Standards Act requires: the pay above your regular rate for hours over 40 in a workweek, usually the “half” of time-and-a-half. Your regular pay for those hours doesn't count, and neither does pay above time-and-a-half (such as the extra in double time), state-law-only overtime, or weekend and holiday premiums when you didn't work over 40 hours.
What is the maximum No Tax on Overtime deduction?
$12,500 a year, or $25,000 if married filing jointly. On a joint return the $25,000 is a combined limit, not per spouse.
Is there an income limit for No Tax on Overtime?
Yes. The deduction drops $100 for every full $1,000 of modified adjusted gross income over $150,000 ($300,000 for joint filers). For example, $5,000 of qualified overtime at $165,800 MAGI is reduced by $1,500, to $3,500.
How do I figure my overtime premium if my W-2 doesn't show it?
For 2025 the IRS allows several methods. If your pay stub shows total pay for overtime hours at time-and-a-half, divide it by 3 (the IRS example: $15,000 ÷ 3 = $5,000). If you were paid double time, divide the total by 4 ($20,000 ÷ 4 = $5,000). Otherwise use a reasonable method based on your regular rate and hours over 40. Starting with 2026, employers report it in W-2 Box 12 with code TT.
Can I claim No Tax on Overtime if I'm married filing separately?
No. Married taxpayers must file jointly, and the person who earned the overtime needs a valid Social Security number.
Also earn tips? Try the No Tax on Tips calculator. The two deductions are separate, and you can claim both on Schedule 1-A.
Sources: IRS Schedule 1-A (Form 1040) and the 2025 Form 1040 instructions; IRS Working Families Tax Cuts guidance; 2026 General Instructions for Forms W-2 and W-3. Checked October 2026.