How does the FLSA deduction for Qualified Overtime Compensation apply?

kiwonp19 · ‎February 3, 2026

Will it reduce my tax liability or add to my refund amount?

rjs · ‎February 3, 2026

The deduction for overtime reduces your taxable income. It does not directly reduce your tax or increase your refund by the amount of the deduction. Since your taxable income is lower, your tax will be lower or your refund will be higher. But it's not dollar for dollar. For example, if you are in the 22% tax bracket, a deduction of $5,000 of qualified overtime compensation will reduce your tax or increase your refund by $1,100 (22% of $5,000).

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rjs · ‎February 3, 2026

The deduction for overtime reduces your taxable income. It does not directly reduce your tax or increase your refund by the amount of the deduction. Since your taxable income is lower, your tax will be lower or your refund will be higher. But it's not dollar for dollar. For example, if you are in the 22% tax bracket, a deduction of $5,000 of qualified overtime compensation will reduce your tax or increase your refund by $1,100 (22% of $5,000).