The overtime deduction has been working in the past.
- Your full W-2 wages (including overtime) are reported on 1040 tax return as taxable income.
- The deduction is applied on line 13b of the tax return.
Qualified overtime isn't taxable in 2025. This doesn't apply to the straight-time portion of earnings.
- The straight time portion of the overtime hours is still taxed.
- However, the additional 50% incentive is not.
- Your full W-2 wages (including overtime) are reported on 1040 tax return.
- The deduction is applied on line 13b of the same tax return.
- Details of the entry can be found on Form 1A in Part III.
For more information on the topic, see No tax on Overtime
Employers may include Qualified Overtime in Box 14 of the W-2.
To get credit for the deduction of Overtime pay.
- Post your W-2 exactly as it appears.
- Continue through the interview.
- You will reach the screen Let’s Check for Uncommon Situations
- Select the box that says Overtime.
- There are alternatives on how to enter this information
- This information is NOT on your W-2
- It may be on your final pay stub,
- You may be able to find the stub online, or
- Contact your employer
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