overtime

Bpasten90 — Wed, 06 Aug 2025 21:35:53 GMT

I am a homemaker. How will the new bill affect me and my family when we file joint returns? We have 1 child under 1 year old. My husband works a lot of overtime

Re: overtime

Terri Lynn — Wed, 06 Aug 2025 21:56:09 GMT

The One Big Beautiful Bill introduces a temporary deduction for qualified overtime compensation, for tax years 2025 through 2028. This will allow you to deduct a portion of the premium pay your husband earns for his overtime hours.

You can deduct up to $25,000 of qualified overtime pay on your joint return.
This deduction is available whether you take the standard deduction or itemize.
The deduction begins to phase out if your household's modified adjusted gross income exceeds $300,000.

It is important to know that qualified overtime specifically refers to the "half" portion of "time-and-a-half" pay required by the Fair Labor Standards Act.

For example: if your husband earns $40 an hour, his overtime would be paid at $60 an hour. The extra $20 for each overtime hour would be eligible for the deduction.

The bill also makes changes to the Child Tax Credit, which is a significant benefit for families with children.

The credit is increased from $2,000 to $2,200 per qualifying child.
The income threshold for the credit is made permanent, so it won't be reduced at the end of 2025. It begins to phase out at $400,000 for married couples filing jointly.
A portion of the credit is refundable, meaning you could receive a refund even if you don't owe federal income tax.

For more details see:

One Big Beautiful Act of 2025 Provisions

One Big Beautiful Bill Tax Changes and How it Impacts You-TurboTax

See How Tax Changes Impact You with the Tax Reform Calculator

Please feel free to reach back out with any additional questions.

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Re: overtime

AmitaR — Wed, 06 Aug 2025 22:00:19 GMT

The One Big Beautiful Bill will be beneficial to you in the following ways:

Increased Child Tax Credit: increased from $2,000 to $2,200 for qualified taxpayers
no tax on overtime - deduction of up to $12,500 per taxpayer with phaseout for MAGI over $150,000 (over $300,000 for Married Filing Jointly filers)

Hope that helps @Bpasten90

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