United States · Tax year 2026, filed in 2027
No tax on overtime calculator 2026
A single worker on $70,000 whose overtime premium (the “half”) is $8,000 deducts all of it in 2026, cutting their federal income tax by $1,310.00. With $6,500 withheld, that is a $1,240.00 refund.
Change the answers below to see your own figures. It runs on the same engine as our full tax refund calculator.
Federal tax refund, 2026 return · single
$8,000.00 overtime deduction
It lowers your tax by $1,310.00. Your estimate: $1,240.00 refund.
Your return, step by step
| Wages (your adjusted gross income) | $70,000.00 |
|---|---|
| Standard deduction | −$16,100.00 |
| No tax on overtime | −$8,000.00 |
| Taxable income | $45,900.00 |
| Federal income tax (top bracket 12%) | $5,260.00 |
| Tax for the year | $5,260.00 |
| Federal tax withheld from your pay | $6,500.00 |
| Your refund | $1,240.00 |
An estimate for wages only, not a filed return. Federal only: no state refund.
Who gets it, and how much?
Who qualifies
- Only the extra part of overtime pay that federal law (the Fair Labor Standards Act) requires: the “half” in time-and-a-half. On $20 an hour, overtime pays $30, and $10 of each overtime hour counts.
- Only overtime that federal law requires counts (for most hourly workers, hours over 40 in a week), and only its extra half, even if your employer pays more.
- You need a Social Security number valid for work, and a married couple must file jointly.
- You get it whether you take the standard deduction or itemize.
How much
- Up to $12,500 a return, or $25,000 married filing jointly.
- It shrinks by $100 for each full $1,000 of income over $150,000 ($300,000 married filing jointly), so it is gone at $275,000 ($550,000).
- It lowers income tax only. Social Security and Medicare are still taken from overtime pay.
When
- Tax years 2025 to 2028 only, unless Congress extends it.
- For 2026, your employer shows qualified overtime on your Form W-2 in box 12, code TT.
A worked example
A single worker on $70,000 whose overtime premium (the “half”) is $8,000 deducts all of it in 2026, cutting their federal income tax by $1,310.00. With $6,500 withheld, that is a $1,240.00 refund.
| Deduction | $8,000.00 |
|---|---|
| Tax it saves | $1,310.00 |
| Taxable income | $45,900.00 |
| Tax for the year | $5,260.00 |
| Estimate | $1,240.00 refund |
The result panel above starts on this example, step by step.
What does this estimate leave out?
- It is an estimate, not tax advice and not a filed return.
- State refunds: no state income tax is included, in any state. It is your federal refund only. States decide for themselves whether to follow the new federal deductions, and many do not.
- Self-employment income and self-employment tax, investment income (interest, dividends, capital gains) and any other income besides wages.
- Credits other than the child tax credit and the credit for other dependents: no earned income credit, education credits or child care credit.
- The Additional Medicare Tax (for one job it is withheld as it is owed), the 37% bracket’s trim of itemized deductions, and the route to the refundable child credit for families with three or more children and very low pay.
What else can I work out?
- Tax refund calculator Free 2026 tax refund calculator with the new deductions for tips, overtime, seniors and car loan interest, and the $2,200 child tax credit. No sign-up.
- Child tax credit calculator Work out your 2026 child tax credit: $2,200 a child under 17, up to $1,700 of it refundable, $500 for other dependents, and the income limits.
- No tax on tips calculator See what the no tax on tips deduction is worth to you in 2026: up to $25,000 of tips off your taxable income, the income limit, and your refund.
- Senior deduction calculator Work out the 2026 senior deduction: $6,000 for each person 65 or over, how it shrinks above $75,000 of income, and your refund.
- Car loan interest deduction calculator Work out the 2026 car loan interest deduction: up to $10,000 of interest on a new US-assembled car, the income limit, and your refund.
- Paycheck calculator 2026 Take-home pay per paycheck in 19 states, with 401(k), HSA and every pay schedule.
- Pay by job BLS pay and take-home for 830 jobs, to fill in your wages.
How withholding works: the W-4 form.
Questions about the no tax on overtime
Is all overtime pay tax free?
No. Only the extra “half” of time-and-a-half that federal law requires, up to $12,500 a year ($25,000 joint). In our example, a $8,000 premium saves $1,310.00.
How do I work out my overtime premium?
Take the overtime hours you worked at time-and-a-half and multiply by half your regular hourly rate. For 2026 your employer shows the amount on your W-2 (box 12, code TT).
Is there an income limit for no tax on overtime?
Yes. It shrinks by $100 for each full $1,000 of income over $150,000 ($300,000 married filing jointly).
Which years does it cover?
Tax years 2025 to 2028.
Do I still pay Social Security and Medicare on overtime?
Yes. The deduction lowers federal income tax only.