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Level 3
Apr 6, 2026 12:02 AM UTC
Question

Overtime Pay

The new 2025 tax law exempted overtime pay (limited in amount) from taxable income.  The overtime pay can normally be found in box 14.  Some companies have not entered the overtime pay in box 14 and just have some memo entry.  If you have overtime pay not reported in box 14, you have to find where to report that information in Turbo Tax in other situations, etc. to be able to not have your overtime pay taxed.  Some states, like Illinois, do not follow the new law and tax overtime pay.  Even though you put overtime pay deduction into Turbo Tax for Federal tax purposes, that taxable income reduction does not automatically carryover to the Illinois tax return.  Therefore, you most likely have to put the add back in manually and not rely on Turbo Tax taking care of the overtime add back.

    1 reply

    Level 15
    Apr 10, 2026 2:25 AM UTC

    When you enter your W-2, there is a page for special circumstances that has a box to check for "overtime."  This will launch an interview to cover both OT that is reported separately and OT that is only in box 1.  The calculation will be performed on schedule 1-A, and it will also flow correctly to states that either follow or don't follow the new law.