No tax on overtime calculator
Enter your regular rate and how much overtime you work. This takes the premium half, applies the cap and the income phase-out, and shows what the deduction is worth against your tax.
Two examples, worked
At $26.00 an hour with 8 overtime hours a week for 46 weeks, on $72,000 of income filing single: qualified overtime is $4,784, under the $12,500 cap and below the phase-out, so the full $4,784 is deductible and it takes roughly $1,052 off the tax bill.
At $34.00 an hour with 12 overtime hours a week for 50 weeks, on $158,000 of income: qualified overtime is $10,200, cut to the $12,500 cap, then reduced by $800 because the income is $8,000 over the threshold. The deduction lands at $9,400, worth about $2,256.
The phase-out bites the amount you claim, not a fixed income ceiling. With the full $12,500 the deduction runs out at $275,000 of modified AGI. With only $4,000 of qualified overtime it is gone by $190,000, because the same $100 per thousand is eating a much smaller number.
What the deduction is worth at different rates
Qualified overtime and the tax it saves, for someone filing single on $72,000, at eight overtime hours a week for 46 weeks.
| Regular rate | Overtime rate | Qualified overtime | Deduction | Tax saved |
|---|---|---|---|---|
| $16.00 | $24.00 | $2,944 | $2,944 | $648 |
| $20.00 | $30.00 | $3,680 | $3,680 | $810 |
| $24.00 | $36.00 | $4,416 | $4,416 | $972 |
| $28.00 | $42.00 | $5,152 | $5,152 | $1,133 |
| $32.00 | $48.00 | $5,888 | $5,888 | $1,257 |
| $38.00 | $57.00 | $6,992 | $6,992 | $1,389 |
Getting your own figure right
For 2026 the number you need is printed on your W-2 in box 12 with code TT. That box reports total qualified overtime for the year, and it is not limited by the cap, so expect it to be larger than what you can deduct.
For 2026 onward you may deduct only what is reported there. If the box is missing or wrong, ask for a corrected W-2c; a substitute Form 4852 will not do. For 2025 there was no required reporting, and the IRS set out reasonable methods for working the figure out yourself in Notice 2025-69.
Common questions
- What counts as qualified overtime?
- The premium above your regular rate on hours the FLSA required to be paid at overtime: overtime hours, times one half, times the regular rate. Pay above the FLSA requirement does not add to it.
- Where do I find the figure on my W-2?
- Box 12, code TT, from the 2026 form onward. It reports your total qualified overtime, before the cap, and from 2026 you can only deduct an amount that appears there.
- Does double time count?
- Only up to what the FLSA required. Where double time is a state rule or a contract term rather than an FLSA requirement, the extra above time and a half does not qualify.
- Will I see this in my paycheck?
- Not automatically. Employers cannot reduce withholding for it unless you file an updated Form W-4, which for 2026 has a line for exactly this on its Deductions Worksheet.