01/06/2026
Good afternoon! *PLEASE READ* When getting your tax paperwork together to drop off, mail, email or if you're coming in to see us for an appointment (if you worked any overtime) make sure you include your last pay stub for the year. Only if you had any overtime hours. Some employers will not be including the information we need for the deduction on your W2 for 2025, but we can get that information off of your last pay stub.
"NO TAX ON OVERTIME" deduction, introduced by the One Big Beautiful Bill Act (OBBBA), allows eligible employees to deduct the premium portion of their overtime pay from the federal taxable income.
For the tax years 2025-2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay (the "half" portion of "time-and-a-half" compensation).
- Maximum annual deduction is $12,500 ($25,000 for joint filers)
- Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers)
