02/18/2026
🚨 Overtime Pay & Taxes – Let’s Clear Up the Confusion! 🚨
There’s been a LOT of misinformation floating around about overtime and taxes. Let’s break down the myths vs. reality 👇
❌ Myth: All overtime pay is tax-free.
✅ Reality: Only the “premium” portion (the extra 0.5x — not the full 1.5x rate) may qualify for the deduction.
❌ Myth: You pay no taxes on overtime at all.
✅ Reality: Overtime is STILL subject to Social Security, Medicare, and possibly state & local taxes.
❌ Myth: The deduction is automatic for everyone.
✅ Reality: It is NOT automatic. Phase-outs apply if your Modified Adjusted Gross Income (MAGI) exceeds:
• $150,000 (Single)
• $300,000 (Married Filing Jointly)
❌ Myth: Married couples can file separately and still claim it.
✅ Reality: Married taxpayers must file a joint return to claim the deduction.
❌ Myth: It applies to all extra hours worked.
✅ Reality: It only applies to qualified overtime required under the Fair Labor Standards Act (FLSA).
