2025 Working familytax cut for overtime pay where do you enter it

[gingerlyn_03]

it stated part of my overtime pay could be deducted?

[MinhT1]

The OBBA has introduced a new deduction for overtime pay from tax year 2025. You may deduct up to $12,500 of qualified overtime premium on your Federal tax return (up to $25,000 for MFJ). The deduction is gradually phased out if your MAGI exceeds $150,000 ($300,000 for MFJ). The deduction is for the overtime premium, which is the portion over your regular pay.

For tax year 2025, your employer may list non-taxable overtime in box 14 with a specific label like "FLSA OT Prem". You might also receive a separate year-end statement giving you the amount. Otherwise, you have to calculate the overtime premium to enter on your tax return.

For tax year 2026 onwards, a specific Box 12 code will be used. This amount is an above-the-line deduction, meaning it will be subtracted from your gross income on form 1040.

In TurboTax Online, this is how you enter the qualified overtime premium:

1. After entering your form W-2, you'll see a screen titled Let's Check for Other Situations
2. Put a checkmark on Overtime and click Continue
3. Follow the TurboTax questionnaire to enter your qualified overtime premium
4. This deduction will transfer to Schedule 1-A of your form 1040, then to line 13b of your form 1040.

[user17701750410]

Hello,   I entered the overtime pay but it is not flowing through to my 1040.   I'm using Turbotax Desktop.  Can anyone advise if there's a step I'm missing?  Thanks!!

[JamesG1]

In TurboTax Desktop Deluxe, enter the IRS form W-2.  At the screen Let's check for other situations, select the option Overtime.  Click Continue.

Follow the screens to calculate the deduction or simply enter the value.

Then you will see the screen Were you an exempt employee?

You will need to declare whether you earned the overtime pay as an employee:

• exempt from the Fair Labor Standards Act or 
• non-exempt from the Fair Labor Standards Act.  

You must select I was not an exempt employee to qualify for the deduction.

Click on the hyperlink What's an exempt employee for direction.  Exemptions from the minimum wage or overtime standards of the FSLA may also be found here.

The deduction is reported on IRS Schedule 1-A Part V lines 14 through 21.  To view, select FORMS in the upper right hand corner of the screen.

@user17701750410