Qualified Overtime

Qualified OT tracking calculator

Use your pay records to estimate the FLSA overtime premium. The result is before deduction caps, income phase-outs, and other personal tax limits.

IRS FS-2026-13 Checked Sep 8, 2026
Calculate from
$
Use the regular rate for each workweek.
What does this mean?

Confirm covered, nonexempt status with payroll.

Personal deduction limits (annual)

Annual limits apply to your full-year qualified amount. A single week's estimate is not an annual deduction.

Annual taxpayer details
$

Modified adjusted gross income (MAGI) is used for a phase-out warning. This tool does not calculate your final deduction or tax savings.

Start with your pay records

Find the right number on your pay stub

What does Qualified OT Tracking mean?
Sample pay stub highlighting $360 of time-and-a-half overtime pay: eight hours at $45 with a $30 regular rate.
Sample only. Payroll layouts vary.

A STANDARD TIME-AND-A-HALF EXAMPLE

The premium is one part
of your overtime pay.

At a $30 regular rate, 8 overtime hours pay $360. Of that, $240 is the regular-rate portion and $120 is the half-time premium.

$30.00 × 0.5 × 8 hours = $120.00

Assumes FLSA-covered, nonexempt overtime in one workweek. Personal limits and reporting rules still apply.

Choose the method that fits your records

Use a separately reported qualified amount if you have one. Otherwise, choose total overtime pay or enter your regular rate and hours. Keep the statement you used so payroll or your tax preparer can check the result.

Separate FLSA premium

If a statement separately reports the FLSA overtime premium, use that amount as the starting estimate.

Total time-and-a-half overtime

For standard time-and-a-half pay, the premium is one third of total overtime earnings. The rest is the regular pay for those hours.

Higher overtime rate

If overtime was paid above time-and-a-half, the estimate should isolate only the FLSA-required half-time premium portion.

No separate statement

If no annual statement is available, estimate from regular rate and overtime hours, then keep notes showing why that method was used.

How to read the result

The result estimates your qualified overtime compensation. Your deduction may be lower because of annual caps, income limits, or other tax rules.

For an annual total, you can also review the filing-status cap and check whether your MAGI may trigger a phase-out warning.

Learn how tracking worksPrepare a CPA handoff
Four pay-period record sheets connected by a teal ribbon to a bound annual record.

Documentation checklist

  • Annual W-2, Form 1099, portal statement, or separate employer statement.
  • Pay statements showing regular rate, overtime hours, overtime rate, and pay period.
  • Notes explaining the selected method and any regular-rate approximation.
  • Questions for a tax professional about taxpayer eligibility, filing status, SSN rules, and phase-out.
Deduction rules and limitsTracking template packEmployer reporting workflow

Official sources

Source baseline checked 2026-09-08

Review the official guidance directly

IRS FAQ FS-2026-13: Qualified overtime compensation deduction

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

Internal Revenue Service | FAQ

View official 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

View official source

IRS Notice 2025-69

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

Internal Revenue Service | Notice

View official source

2026 Instructions for Forms W-2 and W-3

Explains 2026 Form W-2 reporting, including Box 12 code TT for qualified overtime compensation.

Internal Revenue Service | Instructions

View official 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

View official source