Guides

• Shift Differentials and Bonuses Raise Your Tax-Free Overtime — The FLSA regular rate includes shift differentials and nondiscretionary bonuses, so the overtime premium you can deduct is higher than half your base rate.
• Qualified Overtime from Pay Stubs: ÷ 3, ÷ 4 and the Other IRS Methods — IRS Notice 2025-69 lets you work out qualified overtime from pay stubs: the premium as shown, time-and-a-half pay ÷ 3, double-time pay ÷ 4, or hours × ½ × rate.
• The Overtime Deduction Phase-out: $100 per Full $1,000 Over $150,000 — The deduction drops $100 for each full $1,000 of modified AGI over $150,000 ($300,000 joint). A part of $1,000 doesn't count. It's gone at $275,000 single with the full $12,500.

Tools

• No tax on overtime, worked out from your own timecards
• Schedule 1-A Part III, line by line
• Check your W-2 code TT against your timecards

Comparisons

• When your overtime changes week to week: an alternative to notaxonovertimecalc.com