You can do it using your last pay stub. You will just need to enter the .5 of your OT. So if your employer breaks your paystub down by Regular and Premium, you would use the premium amount. If they just give you a lump sum of what you earn for OT without breaking it down, then you would divide that by 3 to get the OT Premium amount. If you are paid double time you would divide it by 4. Only the .5 amount is deductible.
For 2025 through 2028, qualified employees may deduct $12,500 of their OT from their income.
To qualify the following must apply:
- You must be a non-exempt employee eligible for Overtime under the federal Fair Labor Standards Act
- The Overtime must be on hours worked OVER 40 hours. (if you live in a state where OT pay is required after 8 hours, this does not apply)
- Overtime must be paid at more than your regular hourly rate.
- Only the amount that is over your regular hourly rate is deductible. For example, If you make $30 per hour and are paid OT at $45 an hour, you can only deduct $15 per hour as overtime deduction.
- Your filing status cannot be Married Filing Separately
- Your income must be less than $150,000 if you are single or $300,000 if Married Filing Jointly.
To do so in TurboTax take the following steps:
- Enter your W-2
- Enter your Overtime in box 14 and select Overtime in the dropdown
- Continue through to the overtime questions
- You will be given the opportunity to have TurboTax help you calculate your Overtime or You can select you already know the amount.
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