Overtime Tax Deduction Calculator
“No tax on overtime” is real — but only the extra-half portion counts. Calculate what you can actually deduct for 2026.
- · Input is the FLSA-required premium only (the 0.5x half of time-and-a-half) — not total overtime pay. Use the W-2 Box 12 code TT amount when available.
Estimated tax savings (deduction × your marginal rate)
A deduction reduces taxable income — not your tax bill dollar-for-dollar.
The “half portion” rule everyone gets wrong
If you earn $30/hour and work overtime at time-and-a-half ($45/hour), only the $15 premium — the “half” above your regular rate — is deductible, not the full $45. The deduction covers FLSA overtime premium only, capped at $12,500 ($25,000 married filing jointly), phasing out above $150,000 MAGI ($300,000 joint) at $100 per $1,000 of income.
Starting with 2026 W-2s, employers report your qualified overtime premium in Box 12 with code TT — use that number for an exact figure. You claim the deduction on Schedule 1-A whether or not you itemize.
Available 2025–2028. Not available for married filing separately; SSN required. Estimates only — not tax advice.