Phase out for overtime deduction

Forum|Forum|5 months ago
January 24, 2026
2 replies
61 views

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?

ThomasM125

Level 15

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.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

veggiegal

Level 2

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?

MarilynG

Level 15

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