Qualified Overtime

Qualified overtime tracking

Estimate qualified overtime and organize the records behind it

Use the calculator shell to identify the overtime premium portion, then move into a tracking workflow built around IRS and DOL source guidance.

Calculate qualified overtime estimateView the tracking template pack

Not affiliated with the IRS, Treasury, Department of Labor, payroll providers, or tax software vendors. For educational and tracking purposes only.

Calculator

Qualified overtime estimate

Start with tax year, filing status, FLSA status, regular rate, overtime hours, and the pay-statement method that best matches your records.

Qualified overtime starts with FLSA-covered, nonexempt overtime.

Needed when estimating from rate and overtime hours.

Use the annual amount that matches the selected method.

Start with the FLSA overtime premium portion

Qualified overtime is not every overtime dollar on a paycheck. The key starting point is the portion required under FLSA section 7 that exceeds the regular rate of pay.

Confirm FLSA status

The calculator asks whether the worker is covered and nonexempt, because FLSA-ineligible overtime is not treated as qualified overtime compensation.

Match the statement method

Use a separately reported premium when available. If 2025 records do not separate it, use the IRS Notice 2025-69 style method that best matches the payroll statement.

Keep the record trail

Save pay statements, annual summaries, W-2 Box 14 notes, and calculation notes so a preparer can review the estimate.

What this first release does

The site estimates qualified overtime compensation before personal tax limitations. It shows deduction caps, warns about MAGI phase-out thresholds, and points users back to official IRS and DOL sources.

It does not file a return, determine final tax liability, decide employment-law status, or replace a payroll, accounting, legal, or tax professional.

Read the deduction overviewUse the dedicated calculator page

Move from estimate to documentation

A useful estimate is only the first step. The handoff should show how the number was produced and what source documents support it.

Employee worksheet

Capture pay period, regular-rate approximation, overtime hours, overtime method, and statement references.

View templates

Employer workflow

Create a consistent year-end reporting process for covered, nonexempt employees and route edge cases to payroll or counsel.

Employer setup
Qualified overtime deduction guideQualified OT tracking workflowWhat is qualified OT tracking?

Official sources

Source baseline checked 2026-06-25

Review the official guidance directly

IRS FAQ: Qualified overtime compensation deduction

Defines qualified overtime compensation, FLSA overtime eligibility, deduction limits, reporting rules, and taxpayer requirements.

Internal Revenue Service | FAQ

Open source

IRS overview: No Tax on Overtime deduction

Summarizes the deduction cap, MAGI phase-out thresholds, Social Security number rule, and 2025 reporting note.

Internal Revenue Service | Overview

Open source

IRS Notice 2025-69

Provides 2025 methods for individuals estimating qualified overtime compensation when separate reporting is not available.

Internal Revenue Service | Notice

Open source

DOL overtime overview

Explains the FLSA overtime baseline for covered, nonexempt employees working over 40 hours in a workweek.

U.S. Department of Labor | Guidance

Open source