11/16/2025
đ¨ ááŽáážá
áş (áááá
) áážáŹ OT ááŹáᎠááťáŹá¸ááťáŹá¸ ááŻááşáááşáááŻáááş overtime premium records áá˝áąááᯠááąáŹááşá¸ááąáŹááşá¸ ááááşá¸ááŹá¸á፠â áĄáá˝ááşáááşááťáááşáážáŹ ááąáŹááşááťáŽááąáŤáşáᏠááźááşááááŻááşááŤáááş! áááá
âáááá áĄáá áááşááźáŽá¸áá˝ááşáĄáᯠááťáŹá¸áĄáá˝ááş áĄááᯠ$6,000 deduction áááşá¸ ááááŻááşááŤáááşá đ¸đĽ
IRS áá˛áˇ áĄáá
áşááŻááşááźááşáá˛áˇ âNo Tax on Overtimeâ deduction á One Big Beautiful Bill Act (OBBBA) áĄáąáŹááşáážáŹ áááˇáşáá˝ááşá¸áá˛áˇáᏠááźá
áşááźáŽá¸ áááá
ááŻáážá
áş áááşáááŤáᎠá áááşááąáˇáááą áááá ááŻáážá
áşáĄáá ááźá
áşááŤáááşá ááŽáĽáááąá áááşáá˛áˇ qualified overtime pay áá˛áˇ premium portion (time-and-a-half áá˛á âhalfâ áĄáááŻáááŻááşá¸) ááᯠfederal income tax áááą ááťážáąáŹáˇááťááąá¸áááŻááşááŤáááş â ááŤááźáąáŹááˇáş áááá áážáŹ áááá
áĄáá˝ááşáážá
áşáĄáá˝ááş áááşáááş áá˝áąááźááşááááŻááşááŤáááş!
Fair Labor Standards Act (FLSA) áĄáąáŹááşáážáŹ áááŻáĄááşáá˛áˇ overtime pay â áá
áşáááş áá ááŹááŽááťáąáŹáşááźáŽá¸ time-and-a-half ááąá¸ááá˛áˇáĄááťááŻá¸áĄá
áŹá¸á W-2á 1099 ááŤáážáááŻááş áĄááŹá¸áá° ááąáŹááşáá˝áąáážáŹ ááąáŹáşááźááŹá¸áááźáŽá¸á OT premium portion (áĄáááŻáááşááąá¸áá˛áˇáááŻááşá¸) áááŻáᏠááťážáąáŹáˇáá˝ááˇáşáá°áááŻááşááŤáááşá
⢠áááşááᯠClaim ááŻááşááá˛?
Above-the-line deduction ááźá
áşáá˛áˇáĄáá˝ááş itemize ááŻááşá
áᏠááááŻááŤáá°á¸! Pay stubs áááą overtime premium áĄááťááşáĄáááşáá˝áą áá°ááźáŽá¸ áááˇáş tax return áážáŹ áááŻááşáááŻááş áááˇáşáá˝ááşá¸áááŻááşááŤáááşá
⢠Limit áá˛áˇ Phase-Out
â áá
áşáŚá¸áá
áşáážá
áş $12,500
â áááŹá¸á husband áá°á¸áá˝á˛áááşáááş $25,000
â Modified AGI $150,000 (single) / $300,000 (joint) áááą phase-out á
áááş
Married filing separately áĄáá˝ááş áááááŻááşááŤáá°á¸á
đ¨ GOOD NEWS for Overtime Workers! â âNo Tax on Overtimeâ Deduction is here! đŁ
The IRSâs new âNo Tax on Overtimeâ deduction, included under the One Big Beautiful Bill Act (OBBBA), is effective from January 1, 2025, through 2028. This allows you to subtract the premium portion of your qualified overtime pay (the âhalfâ in time-and-a-half) from federal income tax â meaning real savings when you file in 2026 for 2025 taxes!
Hereâs the simple breakdown: đ
⢠What qualifies?
Overtime required under the Fair Labor Standards Act (FLSA) â generally, hours worked over 40 per week paid at time-and-a-half. Must be reported on your W-2, 1099, or similar forms. Only the premium portion counts, not the full OT pay.
⢠How to claim:
Itâs an above-the-line deduction, so no itemizing needed! Just use your pay stubs to report the OT premium on your tax return.
⢠Limits & Phase-Outs:
â Up to $12,500 per year (single)
â Up to $25,000 per year (married filing jointly)
â Phase-out begins at $150,000 AGI (single) / $300,000 AGI (joint)
Married filing separately cannot claim this deduction.
đĄ Pro Tip: If youâre logging lots of OT hours in 2025, keep careful records â this could put thousands back in your pocket. The deduction applies through 2028, and thereâs even an extra $6,000 deduction for seniors.
Will this deduction make you want to take on extra OT shifts? Share your thoughts below! đ¸đĽ
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