No Tax on Overtime Calculator

Q: Is all overtime tax free?

No. Only the premium half of time and a half is deductible, up to $12,500 a year. Your regular rate is still fully taxed.

Q: Do nurses qualify for the overtime deduction?

Most hourly nurses qualify. Salaried nurse managers classified as exempt do not. State-only or union-contract overtime may not count for the federal deduction.

Q: Do truckers get the overtime deduction?

Most long haul truckers do not, because of the FLSA motor carrier exemption. Local delivery drivers and drivers of smaller vehicles often do qualify.

New for 2025 to 2028. Deduct the extra half of your time and a half pay. See your savings in seconds.

Your regular hourly wage ($)

Overtime hours you expect this year

Filing status

Total income for the year (MAGI, $)

Your tax bracket

How the overtime deduction works

The deduction covers the premium part of your overtime pay. That is the extra half in time and a half. Work an hour at $30 regular pay and you earn $45 in overtime. Only the extra $15 is deductible. Your W-2 will show the qualified amount in box 12.

The caps

The most you can deduct is $12,500 per year. Married couples filing jointly can deduct up to $25,000. The deduction runs for tax years 2025 through 2028. You can claim it on top of the standard deduction using Schedule 1-A.

The income phase out

The deduction drops by $100 for every $1,000 of income above $150,000. For married couples the limit is $300,000.

Who qualifies

The overtime must be required by federal law (FLSA). That means hourly workers past 40 hours a week. Overtime that only comes from a state rule or a union contract may not count. Salaried workers who are exempt from overtime do not qualify. You still pay Social Security and Medicare tax on overtime.

Frequently asked questions

Is all overtime tax free?

No. Only the premium half of time and a half is deductible. Your regular rate is still fully taxed. Read the full breakdown at is overtime tax free in 2026.

Do nurses qualify for the overtime deduction?

Most hourly nurses qualify. But salaried nurse managers and state-only overtime have limitations. See the nurses and truckers overtime guide.

Do truckers get the overtime deduction?

Most long haul truckers do not, because of the motor carrier exemption. Local delivery drivers often do. Read the full trucker explanation.

Where does overtime show on my W-2?

Box 12, code TT. This shows your qualified overtime premium, the number you use for the deduction. Read the W-2 codes explained.

This tool gives a simple estimate for planning. It is not tax advice. Confirm your qualified overtime amount on your W-2 and talk to a tax professional before filing.