A federal deduction for the premium portion of overtime pay (the half in time-and-a-half) up to $12,500, or $25,000 on a joint return, for tax years 2025 through 2028.
Only the premium counts, not the whole overtime paycheck, and employers report the qualified amount separately. The phase-out starts at $150,000 of modified AGI ($300,000 joint).
No. Like the tips deduction, it reduces federal income tax only.
Source: IRC 225; IRS Notice 2025-69
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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