Turbotax Overtime tax deduction calculation

Forum|Forum|8 months ago
January 19, 2026
1 reply
281 views

Hi, all.

I'm at the section where Turbotax calculates my qualified Overtime tax deduction. What I input into Turbotax is my total overtime and doubletime pay in 2025. There however is a discrepancy between the value I expected and the value Turbotax calculated.

The equation I used was: (Total_overtime_pay/3) + (Total_doubletime_pay/2) = Qualified overtime.

The qualified overtime Turbotax calculated, however, was about 13% lower than what I calculated.

I am assuming the discrepancy is due to state taxes (California). I wanted to confirm though since when I click "How was this value calculated" on the same website page, the explanation does not include anything about taxes. Does anybody have any other explanation for the discrepancy?

Best answer by AmeliesUncle

Expert Reviewed

The current IRS interpretation of the law is that only the Fair Labor Standards Act (FLSA) required 50% is deductible. That means the double-time would be divided by 4.

For example, normal pay is 100%. The required FLSA is 50%, which is deductible. And your employer double-time is paying another 50%, but that is not required under the FLSA so that is NOT deductible.

Be aware that the rules are only hours in excess of 40 hours count as overtime. I think California also requires overtime pay for working more than 8 hours in a day, but that does not qualify for the overtime deduction unless it also results in over 40 hours during the week.

AmeliesUncleAnswer

Level 15

Expert Reviewed

The current IRS interpretation of the law is that only the Fair Labor Standards Act (FLSA) required 50% is deductible. That means the double-time would be divided by 4.

For example, normal pay is 100%. The required FLSA is 50%, which is deductible. And your employer double-time is paying another 50%, but that is not required under the FLSA so that is NOT deductible.