No Tax on Overtime for Factory and Manufacturing Workers (2026)
Overtime on the line or in the shop can be deducted, up to $12,500. 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 factory and manufacturing workers
Private: runs in your browserEstimate of federal income tax only. Not tax advice.
Example: factory worker
- Machine operator, $28/hour, 320 overtime hours, married filing jointly, $96,000 incomePremium: 0.5 × $28 × 320 hours = $4,480.Deduct $4,480 · save about $538 in federal tax
Planning estimate from pay and hours. Your 2026 deduction uses the code TT amount on your W-2.
What factory workers should know
- Hourly production jobs are usually FLSA overtime-eligible.
- Daily overtime or Saturday premiums from a union contract count only where the FLSA also requires them.
- Code TT on your W-2 shows the qualifying amount.
- Only overtime the federal FLSA requires counts. Extra pay from state law or a contract alone doesn’t.
Factory and Manufacturing Workers: FAQ
Do factory workers qualify?
Usually yes. Hourly manufacturing workers are generally overtime-eligible.
Does union contract overtime count?
Only the part the FLSA itself requires (generally hours over 40 in a week).
How much can a married couple deduct?
Up to $25,000 together on a joint return.
How much overtime can factory 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
- Warehouse WorkersHourly overtime premium, code TT.
- Construction 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.