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No Tax on Overtime Calculator (2026)

Tax year 2026 · Last updated · Maintained by the WattFlow team

For 2026 you can deduct the overtime premium shown in W-2 box 12, code TT: up to $12,500, or $25,000 if married filing jointly. It lowers federal income tax only.

Overtime calculator

Private: runs in your browser
Form 1040, line 11. Include your overtime and tips.
Find the letters TT in box 12. Add up all your W-2s.
More options Tax year, itemizing, special cases
Leave blank if you take the standard deduction.

Estimate of federal income tax only. Not tax advice.

How it works

  1. Only the “half” counts

    Time-and-a-half pays 1.5× your rate. Only the extra 0.5× is deductible. Your W-2 shows it as code TT.

  2. Capped at $12,500

    $25,000 for married couples filing jointly. Add both spouses’ TT together.

  3. Shrinks above $150,000

    You lose $100 for every full $1,000 of income over $150,000 ($300,000 joint).

  4. Claim it on Schedule 1-A

    Part III. You don’t need to itemize. See the Schedule 1-A guide.

Examples

Who qualifies

You can claim it if

  • You’re paid overtime by federal law (usually hourly)
  • You have a Social Security number valid for work
  • You’re single, head of household, or married filing jointly

It doesn’t cover

  • Married filing separately
  • Overtime only required by state law or a union contract (details)
  • Social Security, Medicare or state income tax

No code TT on your W-2?

Ask your employer for a corrected W-2 (Form W-2c). For 2026 you can’t deduct more than code TT shows, and a substitute W-2 (Form 4852) doesn’t count. More about code TT.

No tax on overtime FAQ

Is overtime tax-free in 2026?

Not fully. You can deduct the overtime premium (the “half” of time-and-a-half) from federal income tax, up to $12,500 or $25,000 joint. Social Security, Medicare and state tax still apply.

How much will I save?

It depends on your tax bracket. A single worker earning $60,000 with $3,125 of qualified overtime saves about $375. Use the calculator for your numbers.

What is code TT on my W-2?

Box 12 code TT is your qualified overtime. From 2026 it’s the number you deduct, and you can’t deduct more than it shows.

My W-2 has no code TT, or it looks wrong. What now?

Ask your employer for a corrected W-2 (Form W-2c). A substitute W-2 (Form 4852) doesn’t count. If TT is too high, deduct only what you were really paid.

Does double time count?

Only part of it. If you’re paid 2× for hours over 40, just 0.5× your hourly pay counts.

Does California daily overtime count?

Not by itself. Only overtime federal law requires counts, which is generally hours over 40 in a week.

I’m salaried. Can I take it?

Only if you’re FLSA non-exempt and get paid overtime. Most salaried managers and professionals are exempt and don’t qualify.

Can married couples filing separately claim it?

No. Married couples must file jointly. You also need a Social Security number that’s valid for work.

Do I need to itemize?

No. You can take it with the standard deduction. It goes on Schedule 1-A, Part III.

Is there an income limit?

Yes. You lose $100 for every full $1,000 of income over $150,000 ($300,000 joint). A single filer is fully phased out at $275,000.