The information provided on No Tax on Overtime Calculator is for general educational and informational purposes only.
Our calculator and website content are designed to help users understand qualified overtime compensation and estimate the potential federal income-tax effect of the qualified overtime deduction.
Calculator Disclaimer
The No Tax on Overtime Calculator provides an estimate based on the information entered by the user.
It is not a tax return preparation tool and does not reproduce every calculation used by the Internal Revenue Service.
Actual tax results can depend on many factors, including:
- Filing status
- Qualified overtime compensation
- Modified adjusted gross income
- Other income
- Adjustments
- Deductions
- Tax credits
- Tax withholding
- Other information reported on your tax return
For this reason, the calculator’s result should be treated as an estimate rather than a guaranteed tax saving, deduction, refund, or final tax liability.
Overtime Is Not Completely Tax-Free
The term “no tax on overtime” can be misleading.
Qualified overtime compensation may be eligible for a federal income-tax deduction, but this does not mean that all overtime wages are exempt from taxation.
Overtime compensation can still be included in gross income and can generally remain subject to applicable federal income-tax withholding and employment taxes.
The qualified overtime deduction is determined under the applicable federal tax rules when preparing the tax return.
Qualified Overtime Compensation
For purposes of the federal deduction, qualified overtime compensation generally refers to overtime compensation required under Section 7 of the Fair Labor Standards Act and paid above the employee’s regular rate.
For common time-and-a-half overtime, the qualified portion generally corresponds to the additional half of the regular rate rather than the employee’s entire overtime wage.
Not every payment described by an employer as overtime necessarily qualifies for the federal deduction.
Federal Estimate Only
The calculator currently provides an estimate of the federal income-tax effect of qualified overtime compensation.
It does not calculate state or local income-tax savings.
State tax rules vary by jurisdiction and may have different treatment of overtime-related deductions.
Users should review their applicable state and local tax rules separately.
Tax Year and Tax Rules
Tax laws and administrative guidance can change.
The calculator is designed to use the tax-year information implemented in its current version. Users should always verify the applicable rules for the tax year being filed.
For 2026, the federal qualified overtime deduction can generally be up to $12,500 per individual return or $25,000 for a joint return, subject to the applicable income limitations.
W-2 Code TT
For 2026 and later tax years, qualified overtime compensation is reported on Form W-2 using Box 12, Code TT.
Code TT represents qualified overtime compensation. It is not the same as total overtime wages and it is not the same as your final tax savings.
If your W-2 appears to contain an incorrect or incomplete Code TT amount, contact your employer or payroll department and request a corrected W-2 when appropriate.
No Professional Tax Advice
Nothing on this website should be considered personalized tax, legal, accounting, or financial advice.
We do not know your complete financial or tax situation and cannot determine whether a particular deduction or tax treatment applies to you.
If you need advice about your individual circumstances, consult a qualified tax professional.
No Guarantee
We do not guarantee:
- A specific tax deduction
- A specific tax refund
- A specific amount of tax savings
- A specific tax liability
- That every overtime payment qualifies
- That the calculator result will exactly match your tax return
The calculator is an estimation tool intended to improve understanding of the federal qualified overtime deduction.
Third-Party Information
This website may reference information from government agencies and other external sources.
Where appropriate, users should review the original source documents and current official guidance.
For federal overtime deduction information, the Internal Revenue Service and applicable federal tax forms and instructions should be treated as authoritative.
Changes to This Disclaimer
We may update this disclaimer when the calculator, website methodology, or applicable tax rules change.
Users should review the latest version of this page before relying on information from the website.
Contact
If you believe information on the website is outdated or contains an error, you can contact us through our Contact Us page.
Final Notice
By using this website and calculator, you acknowledge that the information and calculations are provided for educational and informational purposes and that you are responsible for verifying your own tax information before filing a tax return.
Always use your actual tax documents and current IRS instructions when determining your final tax position.