No Tax on Overtime for Construction Workers (2026)
Hourly crew members can deduct the overtime premium. You can deduct the overtime premium (the “half” of time-and-a-half) up to $12,500, or $25,000 if married filing jointly. For 2026, use the code TT amount on your W-2.
- Cap $12,500 · joint $25,000
- W-2 box 12 code TT
Overtime calculator for construction workers
Private: runs in your browserEstimate of federal income tax only. Not tax advice.
Example: construction worker
- Carpenter, $34/hour, 220 overtime hours, single, $85,000 incomePremium: 0.5 × $34 × 220 hours = $3,740.Deduct $3,740 · save about $823 in federal tax
Planning estimate from pay and hours. Your 2026 deduction uses the code TT amount on your W-2.
What construction workers should know
- Hourly trades workers on payroll are usually overtime-eligible.
- 1099 subcontractors aren’t employees and don’t get FLSA overtime.
- Prevailing-wage jobs: the premium is based on your regular rate; your employer reports it in code TT.
- Only overtime the federal FLSA requires counts. Extra pay from state law or a contract alone doesn’t.
Construction Workers: FAQ
Do construction workers get no tax on overtime?
Hourly employees usually do. Independent contractors don’t.
What about foremen?
If you’re hourly and paid FLSA overtime, yes. Salaried exempt supervisors don’t.
Do I use pay stubs or my W-2?
For 2026, the code TT amount on your W-2.
How much overtime can construction workers deduct?
Up to $12,500 of qualified overtime, or $25,000 on a joint return, for 2025 through 2028. It shrinks above $150,000 of income ($300,000 joint).
Does this lower Social Security or Medicare?
No. It only lowers federal income tax. State tax depends on your state.
Related tools and guides
- Factory and Manufacturing WorkersHourly overtime premium, code TT.
- Warehouse WorkersHourly overtime premium, code TT.
- Truck DriversSpecial FLSA rules apply. See what counts.
- No tax on overtime calculatorW-2 code TT or an hours estimate, cap, phase-out and tax saved.
- W-2 box 12 code TTWhat code TT means, and what to do if it is missing or wrong.
- Double time and state overtimeDouble time, daily overtime, contracts: what counts.
- No tax on overtime by jobNurses, police, firefighters, drivers and more.