Why I Built This Site
The One Big Beautiful Bill Act, signed in July 2025, created a real new federal income tax deduction for overtime pay. For the first time, millions of hourly W-2 workers — nurses pulling extra shifts, factory workers running production lines, construction crews, retail and warehouse staff — can deduct part of their overtime earnings from federal income tax. The catch: the rule is genuinely complicated, only the half-time premium qualifies (not the full 1.5×), and it phases out at higher incomes.
I built this calculator because the people who would benefit most from this deduction were the least likely to figure it out on their own. The IRS guidance is written for tax professionals. The major tax software products bury the calculation inside paid subscription tiers. State tax sites barely mention it. And generic search results are full of vague articles that explain the law in concept but never actually do the math.
So this site does one thing well: takes your hourly rate, your overtime hours, and your filing status, and tells you what you'll actually save. No login. No data sent to any server — every calculation runs in your browser. No upsell to a paid product. If you want to come, run the numbers, and leave, that's exactly what the site is built for.
What This Calculator Does (and Doesn't)
✓What it does
- Calculates federal income tax savings from the OBBBA overtime premium deduction (IRC §225)
- Handles all four filing statuses with correct caps
- Applies the income phase-out automatically based on your MAGI
- Shows what FICA you still owe on overtime pay
- Covers tax years 2025–2028
- Generates a shareable URL with your inputs
- Works on any device, with no account required
✗What it doesn't do
- Calculate state income taxes (only 7 states currently conform — see the State Guide)
- Replace a tax professional for complex situations like multiple W-2s, AMT, or unusual deductions
- Store any of your data — nothing is sent to a server, nothing is logged
- Account for every interaction with other credits (CTC, EITC, etc.)
- File your tax return — that still happens through your tax software or preparer
How Accuracy Is Maintained
The calculator math is built directly from the statutory text, not paraphrased from secondary sources. Every formula maps to a specific section of law:
- The premium calculation — regular rate × 0.5 × overtime hours — comes directly from IRC §225(c)'s definition of "qualified overtime compensation"
- The annual cap ($12,500 single / $25,000 joint) is the cap as written in IRC §225(b)
- The phase-out ($100 per $1,000 of MAGI above $150K single / $300K joint) is the formula in IRC §225(b)(2)
- The 2025 federal tax brackets are sourced from IRS Publication 15-T and Rev. Proc. 2024-40
- The divide-by-3 calculation shortcut referenced in the W-2 guide comes from IRS Notice 2025-69
Primary Sources Used
- One Big Beautiful Bill Act — Public Law 119-21, signed July 4, 2025
- IRC §225 — qualified overtime compensation deduction
- IRC §224 — qualified tips deduction (for the tips calculator)
- IRS Notice 2025-62 — employer transitional reporting relief for tax year 2025
- IRS Notice 2025-69 — calculation guidance for workers, including the divide-by-3 shortcut
- IRS Rev. Proc. 2024-40 — 2025 inflation-adjusted federal tax brackets
- IRS Schedule 1-A — instructions for claiming the deduction on Form 1040
- Fair Labor Standards Act, 29 USC §207 — definition of FLSA overtime
I review this site before each filing season and after any IRS guidance update. If you spot an error or something that's gone out of date, I want to know — see the contact section below.
Who This Is For
The OBBBA overtime deduction was written for one specific kind of worker: a W-2 employee who is non-exempt under the Fair Labor Standards Act and earns time-and-a-half overtime for hours over 40 per week. In practice, that means:
- Registered nurses, LPNs, CNAs, and healthcare workers with frequent picked-up shifts and overtime
- Manufacturing and factory workers on production lines with regular overtime
- Construction workers, electricians, plumbers, and skilled trades on hourly W-2 arrangements
- Retail, grocery, and food service workers who pull extra shifts during busy periods
- Logistics, warehouse, and delivery workers — often substantial overtime
- Any other hourly W-2 employee who is FLSA non-exempt and earns the 1.5× premium
It is not built for self-employed people, 1099 contractors, gig workers, or salaried exempt employees — those workers don't qualify for the deduction at all. If you're not sure where you fall, the Who Qualifies guide walks through the eligibility test in detail.
Legal Disclaimer Important
NoTaxOvertimeCalc.com is an independent educational tool. It is not affiliated with the Internal Revenue Service, the U.S. Department of the Treasury, or any government agency.
All calculations are estimates based on published law and IRS guidance as of May 2026. This tool does not constitute tax, legal, or financial advice. Tax laws may change and individual circumstances vary.
Always consult a qualified tax professional or CPA before filing your tax return. Results do not account for all individual tax situations, alternative minimum tax (AMT), or interactions with other tax credits and deductions.
Contact & Feedback
If you find an error, see something that needs updating, or want to suggest an improvement, please get in touch. Worker-focused tools like this one only stay useful if real users tell me what's broken or unclear.
The fastest path is the contact page. Bug reports, IRS guidance updates I might have missed, suggestions for new calculator features — all welcome.
Explore the site: Frequently asked questions · Eligibility guide · W-2 guide
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