Find Your Tax-Free Overtime
Easily calculate your 2025 overtime tax deduction with our quick tool! If figuring out the tax-free portion of your overtime pay feels a bit perplexing, don’t worry – we’ve got you covered. Keep it simple.
- If your employer didn’t list ‘qualified overtime’ separately on your W-2 for 2025, that’s normal. The IRS said 2025 forms weren’t updated. Use your pay stubs or year-end earnings summary.
- This calculator estimates the premium portion (the amount above your regular hourly pay) – that’s the piece the IRS guidance points to for the deduction.
No-Tax-on-Overtime: find the “premium” portion
Enter your overtime hours and hourly rate. If you had a raise, add another line. This estimates the overtime premium (amount above your regular pay).
And that’s it! We hope this makes calculating your 2025 overtime tax deduction a breeze.
No Tax on Overtime
For tax years 2025 through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay (generally, the “half” portion of “time-and-a-half” compensation) that is required by the Fair Labor Standards Act and reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.
- Maximum annual deduction is $12,500 ($25,000 for joint filers).
- Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
The deduction is available for both itemizing and non-itemizing taxpayers.
🟢 Open Live Comments
Jump to real-time updates on the IGMR comment thread.