What is the no-tax-on-overtime deduction for 2026?
The One Big Beautiful Bill Act created a federal deduction of up to $12,500 per taxpayer ($25,000 for joint filers) on the qualifying overtime portion of wages — the half-time premium above your regular pay rate, not your full overtime hours. The deduction phases out for MAGI above $150,000 (single) or $300,000 (married filing jointly), applies to tax years 2025 through 2028, and only counts overtime required by the Fair Labor Standards Act.