PaycheckHoursWhat counts
Only the extra half of time-and-a-half required by the FLSA counts. For double time, only the FLSA half qualifies. Holiday or weekend premiums without more than 40 hours in a workweek, state-only overtime, pay to FLSA-exempt employees, and tips do not count.
For 2026 onward, look for W-2 box 12 code TT. For 2025, use box 14 or an employer statement showing the qualified premium. If it is not separately shown, divide total time-and-a-half overtime pay by 3. Do not enter the entire double-time premium as qualified overtime.
What it does not change
Social Security and Medicare tax still apply. State income tax is not covered: states decide whether to follow the deduction, and this tool does not model state tax. This reduces taxable income; it is not a refund of all overtime tax. Payroll withholding still applies.
Hourly Paycheck Calculator · Check the IRS Form W-4 guidance before changing withholding.
Income phase-out examples
These tables assume enough qualified overtime to reach the cap. A smaller premium phases out sooner. MAGI steps round down to a whole number.
Single
| MAGI | Overtime deduction |
|---|---|
| $150,000.00 | $12,500.00 |
| $160,000.00 | $11,500.00 |
| $170,000.00 | $10,500.00 |
| $180,000.00 | $9,500.00 |
| $190,000.00 | $8,500.00 |
| $200,000.00 | $7,500.00 |
| $210,000.00 | $6,500.00 |
| $220,000.00 | $5,500.00 |
| $230,000.00 | $4,500.00 |
| $240,000.00 | $3,500.00 |
| $250,000.00 | $2,500.00 |
| $260,000.00 | $1,500.00 |
| $270,000.00 | $500.00 |
| $275,000.00 | $0.00 |
Married filing jointly
| MAGI | Overtime deduction |
|---|---|
| $300,000.00 | $25,000.00 |
| $320,000.00 | $23,000.00 |
| $340,000.00 | $21,000.00 |
| $360,000.00 | $19,000.00 |
| $380,000.00 | $17,000.00 |
| $400,000.00 | $15,000.00 |
| $420,000.00 | $13,000.00 |
| $440,000.00 | $11,000.00 |
| $460,000.00 | $9,000.00 |
| $480,000.00 | $7,000.00 |
| $500,000.00 | $5,000.00 |
| $520,000.00 | $3,000.00 |
| $540,000.00 | $1,000.00 |
| $550,000.00 | $0.00 |
Weekly overtime examples
Each cell shows yearly qualified premium / deduction for a single filer below the income threshold, using 52 working weeks. The deduction is capped.
| Overtime hours (Per week) | $20.00 Qualified premium / deduction | $25.00 Qualified premium / deduction | $30.00 Qualified premium / deduction |
|---|---|---|---|
| 2 | $1,040.00 / $1,040.00 | $1,300.00 / $1,300.00 | $1,560.00 / $1,560.00 |
| 4 | $2,080.00 / $2,080.00 | $2,600.00 / $2,600.00 | $3,120.00 / $3,120.00 |
| 5 | $2,600.00 / $2,600.00 | $3,250.00 / $3,250.00 | $3,900.00 / $3,900.00 |
| 8 | $4,160.00 / $4,160.00 | $5,200.00 / $5,200.00 | $6,240.00 / $6,240.00 |
| 10 | $5,200.00 / $5,200.00 | $6,500.00 / $6,500.00 | $7,800.00 / $7,800.00 |
| 15 | $7,800.00 / $7,800.00 | $9,750.00 / $9,750.00 | $11,700.00 / $11,700.00 |
| 20 | $10,400.00 / $10,400.00 | $13,000.00 / $12,500.00 | $15,600.00 / $12,500.00 |