Deduction for Overtime Pay (Up to $12,500)
Workers who earn overtime may deduct the overtime premium portion of their pay — the “extra half” in “time‑and‑a‑half.”
Key details
Deduction limit: $12,500 per year ($25,000 for married couples filing jointly)
Applies only to overtime required under federal labor rules (FLSA)
Must be reported on a W‑2 or 1099
Available to both itemizers and non‑itemizers
Phases out for higher‑income taxpayers
This deduction is intended to benefit workers who rely on overtime to supplement their income.
