2026 Overtime Tax Deduction Calculator
Estimate your qualified overtime deduction, income phase-out, and federal tax savings for 2026. Calculate the FLSA half-time premium separately from gross overtime pay.
Enter your details and select Calculate, or load the worked example to see a complete result.
The hours estimate is regular rate × qualifying hours × 0.5. Overtime required only by state law or an employment contract may not qualify. When double-time pay exceeds the federal requirement, the entire extra premium is not automatically deductible.
The annual cap is $12,500 per non-joint return or $25,000 for a joint return. Above $150,000 MAGI ($300,000 joint), reduce the capped amount by $100 for each completed $1,000 of excess income, then stop at zero.
Federal savings equal estimated ordinary income tax before the deduction minus tax after it. This follows tax brackets across boundaries, rather than multiplying the whole deduction by one marginal rate. Married taxpayers must file jointly to claim this deduction.
A single filer with $80,000 MAGI, $63,900 taxable income, and $5,000 of eligible overtime premium can deduct $5,000. At these inputs the ordinary federal tax estimate falls by $1,100. A $25 regular hourly rate and 400 qualifying overtime hours produce the same $5,000 premium.
This estimate uses 2026 ordinary federal income tax brackets and isolates this deduction. It excludes credits, AMT, capital-gains rates, QBI interactions, state taxes and payroll taxes. Enter taxable income before this deduction but after any other deductions. Eligibility confirmations are your own assessment; the tool does not verify your records. Rules reviewed September 30, 2026. The linked 2025 Schedule 1-A supplies the phase-out mechanics; 2026 bracket amounts come from Revenue Procedure 2025-32.
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