@rjs wrote:
"The talk" is basically correct. Only the additional 50% is deductible. And the total deduction is limited to $12,500 per person. There is no 80 hour requirement. The deduction phases out for MAGI over $150,000 (over $300,000 for Married Filing Jointly filers). And the deduction for overtime is only available for years 2025 through 2028.
If you normally make $20 an hour, and you work 45 hours one week and are paid $30/hr for the last 5 hours, the tax-free portion is the $10/hr overtime x 5 hours. Your base pay is still taxed normally.
