Qualified Overtime

Recordkeeping

Qualified OT tracking workflow

Keep your pay statements and a record of how you calculated each overtime premium. Those records let payroll or your tax preparer check the amount.

View template pack detailsEstimate my overtime premium

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

Four pay-period record sheets connected by a teal ribbon to a bound annual record.

How to keep a qualified OT tracking record

  1. Collect the annual statement

    Start with W-2, 1099, employer portal, or a separate statement showing qualified overtime or aggregate overtime amounts.

  2. Map pay periods

    Record the pay period, regular rate or approximation, overtime rate, and total overtime pay. Keep the hours over 40 for each workweek separate.

  3. Select the calculation method

    Note whether you used a separately reported premium, total time-and-a-half pay, higher-rate overtime pay, or an estimate from your regular rate and hours.

  4. Summarize for your tax preparer

    Add up the estimated premiums. Include any cap or income phase-out warning, the documents you used, and questions that still need an answer.

What a tracking sheet should capture

Payroll evidence

Pay statement date, employer or payer, pay period, statement reference, and source document location.

Overtime facts

Regular rate, overtime hours, overtime rate, total overtime pay, and whether the premium was separately reported.

Review notes

FLSA status uncertainty, MAGI threshold warning, filing-status questions, and preparer follow-up items.

What your tax preparer needs

Keep each calculation with its pay statement. Your preparer needs to see the figures you entered and why you chose that method.

If you have several employers, keep each employer's records identifiable. Employers can use the same checklist to answer year-end questions and review payroll records.

A documented record packet and summary sheet gathered into an open envelope for professional handoff.
What is qualified OT tracking?CalculatorEmployer tracking setup

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