No Tax on Overtime for Nurses (2026)
Hourly nurses can deduct the overtime premium, including on hospital 8-and-80 schedules. 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
Special rule: Hospital 8-and-80 schedules count the premium your hospital actually pays under that rule (IRS FS-2026-13, Q17).
Overtime calculator for nurses
Private: runs in your browserEstimate of federal income tax only. Not tax advice.
Example: nurse
- Hourly RN, $45/hour, 6 overtime hours a week for 50 weeks, single, $102,000 incomePremium: 0.5 × $45 × 300 hours = $6,750.Deduct $6,750 · save about $1,485 in federal tax
Planning estimate from pay and hours. Your 2026 deduction uses the code TT amount on your W-2.
What nurses should know
- Most staff nurses are paid hourly and qualify. Salaried nurse managers may be exempt.
- Extra pay only from a union contract (for example after 8 hours in a day when your week is under 40) doesn’t count unless the FLSA also requires it.
- Your 2026 W-2 code TT is the number to use.
- Only overtime the federal FLSA requires counts. Extra pay from state law or a contract alone doesn’t.
Nurses: FAQ
Do nurses qualify for no tax on overtime?
Hourly nurses who are FLSA non-exempt do. The deduction covers the overtime premium, up to $12,500 ($25,000 joint).
What about the 8-and-80 system?
The IRS says the premium actually paid under that alternative FLSA method is what counts. Your employer reports it in code TT.
Does shift differential count?
Not by itself. Only the overtime premium the FLSA requires counts.
How much overtime can nurses 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
- EMTs and ParamedicsHourly overtime premium, code TT.
- Police OfficersSpecial FLSA rules apply. See what counts.
- Warehouse WorkersHourly overtime premium, code TT.
- 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.