After you select that you enter your W-2, check the box that that you have the uncommon situation of overtime in the interview that follows. Then, a series of questions will be generated.
Only the overtime (the extra "half" in time-and-a-half) is deductible. How to compute this depends on how the overtime was reported. I understand that the time-and-a-half and double time are separate, but the computation will depend on if they reporting the total overtime or the premium only. If you have the total time-and-a-half, you'd divide by 3 to compute the premium, and for double time, you'd divide by 4 to get the premium. If on your paystub, the time-and-a-half premium only is listed, that is the deductible amount, and the double time premium would need to be divided by 2.
After you indicate that you earned overtime, here are the steps to ensure the wages are properly treated on your tax return:
- On the screen "Let's see if your overtime qualifies as tax-free," select "No help needed—I know what to enter."
- The next screen will ask if you were or were not an exempt employee. Note that you must be non-exempt in order to be eligible for the overtime deduction.
- Next, you will be asked to enter your deductible overtime from your employer, you can continue on, and TurboTax will compute the deduction, if you are eligible.
Here is an article you may find helpful: No Tax on Overtime Explained: Qualified Overtime Deduction Rules for 2025
