2025 Qualified Overtime Deduction Calculator

Estimate the Schedule 1-A deduction for the qualifying FLSA overtime premium, subject to the filing-status cap and MAGI phaseout.

Tax year supported: 2025 only. Reviewed: August 3, 2026.

Premium portion only. Do not enter all overtime wages as the deduction. The tool cannot verify whether the pay was required by the FLSA or reported in the form required by the IRS.

2025 Qualified-Overtime Deduction

Estimates the Schedule 1-A deduction for the overtime premium required by section 7 of the Fair Labor Standards Act (FLSA). It does not make all overtime wages tax-free.

Filing status

Modified adjusted gross income

Use the 2025 Schedule 1-A, Part I modified-AGI amount, not taxable income.

Qualified overtime premium

For time-and-a-half pay, this is generally the extra one-half portion, not the regular wages or the full overtime payment.

Required eligibility confirmations

Every individual whose overtime is included has a valid Social Security number and will include it on the return.The amount is only compensation above the regular rate required by FLSA section 7, not all overtime wages, a contractual premium, or overtime required solely by state law.The qualified overtime was included in reported compensation and is supported by employer records or an eligible information statement.

How the 2025 estimate works

The calculator applies the $12,500 cap, or $25,000 cap for a joint return, to the entered qualified premium and then applies the MAGI phaseout. Contractual overtime, double-time pay, or another premium is not automatically qualified merely because an employer labels it overtime.

Frequently asked questions

Is all overtime pay deductible for 2025?

No. The federal deduction is limited to the overtime premium required by the Fair Labor Standards Act. For time-and-a-half pay, that generally means the extra one-half portion above the regular rate, not the employee's full overtime compensation.

What is the 2025 qualified overtime deduction limit?

The cap is $12,500 for most filing statuses and $25,000 for a joint return, before the MAGI phaseout. The phaseout begins at $150,000 of MAGI, or $300,000 for a joint return. Married filing separately is not eligible.

Can I claim this deduction with the standard deduction?

Yes, if eligible. The qualified overtime deduction is reported on Schedule 1-A after AGI and may be claimed with either the standard deduction or itemized deductions. Payroll taxes may still apply to overtime wages.