Most will report Qualified Overtime on their W-2 income. If so, follow these steps.
Enter the Qualified Overtime Deduction after entering your W-2. At the screen Let's check for other situations, select Overtime. Continue.
At the screen Let's see if your overtime qualifies as tax-free, select either:
- Help me calculate my eligible overtime.
- No help needed-I know what to enter.
Your employer may have reported your Qualified Overtime on either your W-2 or some other document.
For the Qualified Overtime Deduction:
- Maximum annual deduction is $12,500 ($25,000 for joint filers).
- Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
- The deduction reduces federal income tax liability, it does not exempt overtime pay from Social Security and Medicare taxes. Employees will still owe these taxes on their overtime earnings.
- Taxpayers filing as married filing separately are not eligible for the deduction.
- The deduction is available for both itemizing and non-itemizing taxpayers.
See this TurboTax Help.
@rameytybo
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
