topic Phase out for overtime deduction in Get your taxes done using TurboTax

Phase out for overtime deduction

frfaris — Sat, 24 Jan 2026 16:36:39 GMT

I am filing MFJ and my spouse received OT pay in 2025. Our AGI is only slightly over the $300,000 amount which is when the deduction starts to phase out. TurboTax calculated the OT deduction correctly based on her end-of-year paystub, but it then reports that the maximum deductible amount for us is $0 due to the phaseout. By my calculation, the maximum deductible amount should be something less than IRS $25,000 MFJ maximum but not zero since our AGI falls in the phaseout range. Any help explaining why Turbotax is not letting claim any amount for this deduction?

Re: Phase out for overtime deduction

ThomasM125 — Tue, 27 Jan 2026 19:03:55 GMT

One possibility is on the screen that says Were you an exempt employee at (name of employer) you answered I was an exempt employee by mistake. You will see that screen after you indicate that you have overtime earnings after you enter your W-2 form.

Re: Phase out for overtime deduction

veggiegal — Fri, 13 Feb 2026 23:03:43 GMT

Hello - I am having the same issue, however I am filing as Head of Household. My modest overtime *should* be fully deductible since my MAGI is around $200,000 and complete phase out is not until MAGI of $275,000. But Turbo Tax deluxe is saying my deductible OT is $0 due to phase out limits, which appears incorrect to me. How do I fix this?

Re: Phase out for overtime deduction

MarilynG1 — Sat, 14 Feb 2026 02:38:44 GMT

Check the calculations on Schedule 1-A for your Overtime Deduction calculation. If you think it's incorrect, step through the interview section again to check your entries/selections.

@veggiegal

Re: Phase out for overtime deduction

veggiegal — Sat, 14 Feb 2026 20:05:22 GMT

Thank you for your response, @MarilynG1

I looked for this in the "Forms" section Schedule 1-A is not there at all, oddly.

Does Turbo Tax leave it out completely if it thinks I do not qualify? There seems to be an error behind the scenes in calculation, TurboTax @intuit

If MAGI is $200,000 my overtime should still qualify (and deduction should not be $0 as indicated). And, Schedule 1-A should appear in the forms.

How do I fix this?

I will look at Schedule 1-A on the IRS website and do a manual calculation using the PDF

Re: Phase out for overtime deduction

MarilynG1 — Mon, 16 Feb 2026 18:41:09 GMT

No, the entire form should still be there even if you don't qualify for the Overtime Deduction. It's titled 'Additional Deductions'. Part I is MAGI, Part II is No Tax on Tips, Part III is No Tax on Overtime, Part IV is No Tax on Car Loan Interest, Part V is Enhanced Deductions for Seniors.

In FORMS mode, choose 'Open Form' at the upper left and type in 'Schedule 1-A' and if it doesn't show in the popup window, you can create it.

You could also step through the interview sections for any or all of these deductions and the form will be created.

@veggiegal

Re: Phase out for overtime deduction

VolvoGirl — Mon, 16 Feb 2026 18:52:16 GMT

@veggiegal Are you figuring your MAGI the same way as Schedule 1-A? See Schedule 1-A top lines 1-3 to figure the MAGI for Schedule 1-A

https://www.irs.gov/pub/irs-pdf/f1040s1a.pdf

Re: Phase out for overtime deduction

veggiegal — Sat, 21 Feb 2026 16:11:34 GMT

Thank you for your response. Indeed - I did the Schedule 1-A manually (by hand) and see that my original understanding of the deduction was incorrect. Thank you!