It refers to the Fair Labor Standards Act Overtime Payroll. In box 14 of the W-2, select 'Overtime'.
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.
@davoun-brown216
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