No Tax on Overtime Calculator
Estimate your federal overtime deduction under the 2025–2028 provision. Tax year 2025 rules; estimates only — not tax advice.
Method: deduction = qualified time-and-a-half OT pay ÷ 3 (= the FLSA-required half-time premium; higher premiums like double time don't add to it), capped at $12,500 (single) / $25,000 (MFJ), phasing out above ~$150K/$300K MAGI. Tax years 2025–2028. Figures follow IRS summaries of the provision as of September 2026 — verify current rules at IRS.gov before filing.
Who this helps, and by how much
A worker with $15,000 of qualified overtime pay in 2025 deducts $5,000 from taxable income. In the 22% bracket that's about $1,100 of federal tax back. The benefit scales with how much of your pay is true time-and-a-half overtime — a heavy-OT year (utilities, healthcare, manufacturing) benefits most.
What to watch at tax time
- Keep pay stubs that separate overtime pay from regular pay — the deduction needs the OT figure
- The provision expires after tax year 2028 unless extended
- State income taxes generally don't follow this federal deduction
- If your MAGI approaches $150K (single) / $300K (MFJ), estimates become unreliable — phase-out math applies
Worked example: $22/h base, 500 OT hours at $33 = $16,500 OT pay → deduction $5,500 (under the $12,500 cap). At a 22% bracket ≈ $1,210 saved.