Overtime phase out

Forum|Forum|4 months ago
February 7, 2026
1 reply
11 views

I entered my overtime with my W-2 and my AGI is over the $300,000 amount where the phase out begins for married filed jointly. I received this message and my deduction is $0. The information on the TurboTax website says the phase out amount starts at $25,000 and should be reduced from there but the software seems to be taking that amount from what I claimed instead. I should be able to claim $25,000 minus $7,700 for a maximum of $17,300 which my current amount is well below.

“You have $6,984 in qualified overtime, but your income is over the phase-out threshold of $300,000.

This reduces the overtime you can deduct by $7,700, bringing your deduction to $0.”

DianeW777

Level 15

If you would like to send us a “diagnostic” file that has your “numbers” but not your personal information it would help.  If you would like to do this, here are the instructions: (Don't forget to give us the state)

TurboTax Online:

Open your return -Go to the menu panel on the left side of your return and select Tax Tools.

Then select Tools below Tax Tools.
A window will pop up which says Tools Center.
On this screen, select Share my file with Agent.
You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
Reply to this thread with your Token number and your state. This will allow us to open a copy of your return without seeing any personal information.

TurboTax Desktop:

If you like, you can send a copy of your return that will be scrubbed to eliminate your personal data by using these steps:

Click on Online in the top left menu of TurboTax Desktop for Windows
Select 'Send Tax File to Agent'* > Follow the prompts to reach the token number.
- Enter your email used for TurboTax > Enter your code > Send
Write down or send an image of your token number and state then place in this issue.
We can then review your exact scenario for a solution.
Please also tell us any states included in the return. This is necessary for us to view the return.
- *If using a MAC, go to the menu at the top of the screen, select Help, then, 'Send Tax File to Agent')

We will be able to see exactly what you are seeing and we can determine what exactly is going on in your return to provide you with a resolution.

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Anthonyfru

Level 2

I created a diagnostic file and the token is 1326990. I am in Georgia.

DianeW777

Level 15

Thank you for sending your diagnostic file. The reason your return shows the amount you reference of $7,700 as example, is the amount by which your overtime would be reduced.

How the Phase-Out Works: The deduction is reduced by $100 for every $1,000 of MAGI that exceeds the $300,000 threshold.
- Let's say the overall adjusted gross income was $400,000. First you would subtract the maximum AGI allowed for a full deduction ($300,000 for MFJ). In my example this would be $100,000 in excess of the limit.
- Next you will divide $100,000 by $1,000 = $100
- Finally you multiply $100 x $100 = $10,000 | This amount is used to reduce the overtime you actually received to see if have any deduction remaining. $6,984 - $10,000 = zero deduction allowed.

Please update here if you have more questions and we will help.

@Anthonyfru

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