Tax Years 2025–2028 · OBBBA For U.S. workers only · Federal income tax

No Tax on Overtime Calculator — OBBBA Federal Deduction (2025–2028)

A free, accurate calculator built on the One Big Beautiful Bill Act (P.L. 119-21, IRC §225). This tool applies to U.S. federal income taxes only and is designed for American hourly workers covered by the Fair Labor Standards Act (FLSA).

● Updated for 2025–2028 brackets ● No signup required ● Results in real time

Your details

Enter your pay info to estimate your federal tax savings.

Head of Household uses single thresholds. Married Filing Separately is not eligible under OBBBA.
$
Your base hourly rate before overtime multiplier.
FLSA overtime only — hours worked over 40 per week. Don't include daily-only state overtime.
Paid double-time (2×)? Still enter your overtime hours normally — only the 0.5× FLSA premium is deductible regardless of your pay rate.
$
Your regular straight-time pay plus any other taxable wages. We'll add overtime automatically.
$
Leave blank to use total wages. Used to apply OBBBA phase-out rules.

Generated by NoTaxOvertimeCalc.com · No Tax on Overtime Calculator (OBBBA, IRC §225)

U.S. Workers Only

This deduction applies to American workers under federal law only. It is not available in other countries.

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Hourly / Non-Exempt Employees

You must be a W-2 employee covered by the FLSA — not self-employed or a contractor.

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Tax Years 2025–2028

This temporary deduction applies to overtime earned January 1, 2025 through December 31, 2028.

How the deduction works

The One Big Beautiful Bill Act lets eligible W-2 workers deduct part of their overtime pay from federal income tax for tax years 2025 through 2028.

1

Only the half-time premium

You can deduct your regular rate × 0.5 × overtime hours — not the full 1.5× pay. Example: at $30/hr with 10 OT hours, $150 qualifies, not $450.

2

Annual caps apply

Up to $12,500 (single/HOH) or $25,000 (married filing jointly). Married filing separately cannot claim the deduction at all.

3

Phase-out at high incomes

Reduces by $100 per $1,000 of MAGI above $150K (single) or $300K (MFJ). Fully eliminated at $275K / $550K respectively.

Common questions

Quick answers to the most-asked questions about the No Tax on Overtime deduction.

Who qualifies for the deduction?
Only W-2 employees who are non-exempt under the Fair Labor Standards Act (FLSA) and earn time-and-a-half overtime for hours over 40 per week. Self-employed workers, 1099 contractors, salaried exempt employees, and those filing married filing separately do NOT qualify.
Why can I only deduct half (0.5×) my overtime?
OBBBA defines qualified overtime compensation as the FLSA "premium" portion — the amount paid above your regular rate. Time-and-a-half (1.5×) means your regular rate plus a 0.5× premium. The base portion is regular wages and remains fully taxable; only the 0.5× premium is deductible.
Does this reduce my Social Security and Medicare taxes?
No. FICA (6.2% Social Security + 1.45% Medicare = 7.65%) still applies in full to all overtime earnings. The deduction reduces federal income tax only.
What about state income taxes?
As of 2026, no state has conformed to the federal OBBBA overtime deduction. Your state will tax overtime as ordinary wages. Some states have proposed similar legislation — check our State Guide for the latest status.
How do I claim it on my tax return?
Starting with tax year 2025, you'll claim the deduction on Schedule 1-A of Form 1040. For TY2025, employers may report qualifying overtime in Box 14 of your W-2 voluntarily. Beginning TY2026, Box 12 Code TT becomes mandatory.
Is this calculator's result official?
No. This is an estimator built on the publicly available text of P.L. 119-21 and the 2025 federal brackets. It is not tax advice. Always verify with IRS guidance or a licensed tax professional before filing.

See full eligibility guide · Find overtime on your W-2 · State tax conformity guide

How Much Will No Tax on Overtime Save Me?

Your savings depend on your hourly rate, overtime hours, filing status, and tax bracket. A single filer earning $25/hr working 10 overtime hours per week saves approximately $650–$850 per year in federal income tax. Use the calculator above to get your exact number. FICA taxes (Social Security and Medicare) still apply — only federal income tax is reduced.

Disclaimer. NoTaxOvertimeCalc.com is an independent informational resource and is not affiliated with the IRS or any government agency. The calculator above provides estimates only and does not constitute legal, tax, or financial advice. Tax laws change and individual circumstances vary — please consult a qualified tax professional before relying on any figure shown here. Last updated for tax year 2025 federal brackets and OBBBA P.L. 119-21 as enacted July 4, 2025.