No Tax on Overtime Calculator (2026)
See how much of your overtime premium pay you can deduct in 2026 — and what it’s worth in tax savings.
Estimate your deduction
Results update instantlyFiling status
We use this as your MAGI for the phase-out check.
Only the FLSA premium counts — the extra “half” in time-and-a-half, not your base wage.
Your 2026 overtime deduction
$11,500
Estimated tax savings: $2,530 · taxed in the 22% bracket
| Overtime premium pay | $11,500 |
| Statutory cap (single) | $12,500 |
| Phase-out reduction | −$0 |
| Your deduction | $11,500 |
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How the overtime deduction works
Since 2025, federal law lets workers deduct “qualified overtime compensation” — the premium share of overtime pay required by the Fair Labor Standards Act. For tax year 2026, the cap is $12,500 for single filers and $25,000 for married couples filing jointly.
You don’t need to itemize. The deduction is claimed on top of the standard deduction, so it lowers the income the IRS actually taxes either way.
The benefit shrinks at higher incomes: once modified adjusted gross income (MAGI) passes $150,000 (single) or $300,000 (joint), the deduction falls by $100 for every $1,000 over the line.
Worked example
Maria earns $92,000 in 2026, including $11,500 of FLSA overtime premium. Her MAGI is below $150,000, so no phase-out applies. Deduction = min($11,500, $12,500 cap) = $11,500. In the 22% bracket, that’s $2,530 off her federal bill.
Who qualifies for the deduction
- You earned FLSA-required overtime premium pay during 2026
- It appears on your W-2 or a payroll statement as qualified overtime
- You have a Social Security number valid for employment
- Your MAGI is under $150,000 (single) or $300,000 (joint) for the full amount
2026 phase-out thresholds
| Filing status | Full deduction if MAGI below | Phases out fully at |
|---|---|---|
| Single | $150,000 | $275,000 |
| Married filing jointly | $300,000 | $550,000 |
Above the threshold, the deduction drops $100 for every $1,000 of additional MAGI.
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Frequently asked questions
What counts as qualified overtime pay?
Only the premium portion of FLSA-required overtime — usually the extra “half” of time-and-a-half. Base wages and non-FLSA premiums don’t qualify.
Do I need to itemize to claim it?
No. You can claim the overtime deduction whether you take the standard deduction or itemize.
What are the 2026 income limits?
Full deduction below $150,000 MAGI (single) or $300,000 (joint). It phases out $100 per $1,000 above that, ending at $275,000 / $550,000.
How long does this deduction last?
Current law covers tax years 2025–2028. Unless Congress extends it, 2028 is the final year.
Where do I find my overtime premium amount?
For 2026, employers report qualified overtime on your W-2 or a separate payroll statement. If it’s not broken out, ask your payroll department.