Estimate your qualified overtime deduction under the One Big Beautiful Bill Act — the "half" in time-and-a-half can now be deducted from federal taxable income. Free, instant, nothing you type leaves your device.
If you have your 2026 W-2, enter the box 12 code TT amount. For tax years after 2025 the IRS says you may not claim more than that reported amount. Leave blank for an uncapped estimate.
Estimates only, not tax advice. State income tax on overtime is unchanged unless your state conforms. Payroll taxes (Social Security & Medicare) are not affected.
The OBBBA (signed July 4, 2025) added a deduction for qualified overtime compensation for tax years 2025 through 2028. Only the premium portion required by the Fair Labor Standards Act qualifies — the "half" in time-and-a-half. Example: at a $20 regular rate, overtime is paid at $30; only the extra $10 per overtime hour is deductible.
Box 12 code TT shows the total qualified overtime paid during the year, not the amount you can deduct — the statutory cap and MAGI phase-out still apply. For tax years after 2025 you may not claim more qualified overtime than the amount reported to you; if the W-2 is wrong, request a W-2c. Source: IRS Fact Sheet FS-2026-13, Q6 / Q10 / Q20 / Q22, verified 2026-11-13. As an IRS FAQ (not published in the Internal Revenue Bulletin) it is guidance rather than binding authority.
You do not need to itemize to claim it, but you must have a valid Social Security number. Employees should not expect bigger paychecks during the year — this is claimed when you file your return.
Tips and overtime are two separate OBBBA deductions with different caps and eligibility rules. If you receive tips, use the No Tax on Tips Calculator. For state-by-state rates and the state conformity question, see the state index.