Only the half-time premium counts, not the whole time-and-a-half. Overtime cap 12,500 (25,000 joint), tips cap 25,000, minus 100 for every full 1,000 of MAGI over 150,000 (300,000 joint). Schedule 1-A, tax years 2025-2028.
Do you qualify? Hourly staff paid overtime under the FLSA (over 40 hours a week) and workers in an IRS-listed tipped occupation, with a valid SSN. Married filing separately cannot claim. Tax years 2025-2028; the 2026 W-2 shows qualified overtime in Box 12 code TT.
| Total overtime pay on your pay stubs | - |
| Qualified overtime (FLSA half-premium only) | - |
| Phase-out reduction (100 per full 1,000 of MAGI over the threshold) | - |
| No tax on overtime deduction | - |
| No tax on tips deduction | - |
| Total deduction (Schedule 1-A) | - |
| Federal income tax saved | - |
| Overclaim if you enter the whole overtime pay | - |
| Tax understated by that overclaim | - |
| Possible 20% accuracy-related penalty on it | - |
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