GMX
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I think many might not know how to correctly file their taxes in regard to the new OT deduction rules. If one does it wrong, they're going to take a huge deduction, pay less tax, get a big refund, and then have to pay it back (probably with interest and penalties), or maybe get audited. Don't invite the man into your life and file it right the first time!
You cannot deduct your TOTAL Overtime pay, only the half from "time & a half" as we say.
Remember, your overtime deduction covers the difference between your Regular pay and your Overtime pay. It’s not the same thing as your total Overtime.
Example:
Andy T. Clark worked 20 hours of overtime in 2025.
Here’s how Andy gets paid:
$50/hour Regular pay rate (This is called True Overtime on our LES)
$75/hour Overtime pay rate at time & a half (This is called FLSA Premium on our LES)
Since Andy worked 20 hours of Overtime, his TOTAL Overtime pay was $1,500 (20 hours times $75 Overtime rate).
But not all of that is deductible. Andy can only deduct his Overtime Premium (the difference between his regular pay rate and his Overtime pay rate).
Andy’s Overtime Premium is $25 ($75 Overtime rate minus $50 Regular rate). This means Andy’s deductible Overtime pay is $500 (20 hours x $25 Overtime Premium).
Additionally we have that weird OPM FLSA calculation that results in a little extra money from every OT hour, depending on how much Night and Sunday Differential one worked that period. Because of this, our "half" from "time & a half" is more than half. Therefore, one can't just take their rate and do the quick math for the half and multiply by their total OT hours. You will need to count it up yourself from all of your pay statements. For whatever reason, they do not do a YTD for our premium pay meaning you must look at all 26 statements and add up the FLSA Premium figures. This is the number you enter on your tax return to deduct.
I have verified that PP 2025-01 through PP 2025-26 are the correct statements to use for this. It seems weird because PP01 was completely in 2024, and PP26 ended on 12/13/2025, but this is how they figure your income for W-2 purposes. They don't try to figure out the exact amount from January 1 to December 31.
TLDR: Add up all FLSA Premium ONLY from PP01 to PP26 and enter that amount into your taxes for correct OT deduction.
You cannot deduct your TOTAL Overtime pay, only the half from "time & a half" as we say.
Remember, your overtime deduction covers the difference between your Regular pay and your Overtime pay. It’s not the same thing as your total Overtime.
Example:
Andy T. Clark worked 20 hours of overtime in 2025.
Here’s how Andy gets paid:
$50/hour Regular pay rate (This is called True Overtime on our LES)
$75/hour Overtime pay rate at time & a half (This is called FLSA Premium on our LES)
Since Andy worked 20 hours of Overtime, his TOTAL Overtime pay was $1,500 (20 hours times $75 Overtime rate).
But not all of that is deductible. Andy can only deduct his Overtime Premium (the difference between his regular pay rate and his Overtime pay rate).
Andy’s Overtime Premium is $25 ($75 Overtime rate minus $50 Regular rate). This means Andy’s deductible Overtime pay is $500 (20 hours x $25 Overtime Premium).
Additionally we have that weird OPM FLSA calculation that results in a little extra money from every OT hour, depending on how much Night and Sunday Differential one worked that period. Because of this, our "half" from "time & a half" is more than half. Therefore, one can't just take their rate and do the quick math for the half and multiply by their total OT hours. You will need to count it up yourself from all of your pay statements. For whatever reason, they do not do a YTD for our premium pay meaning you must look at all 26 statements and add up the FLSA Premium figures. This is the number you enter on your tax return to deduct.
I have verified that PP 2025-01 through PP 2025-26 are the correct statements to use for this. It seems weird because PP01 was completely in 2024, and PP26 ended on 12/13/2025, but this is how they figure your income for W-2 purposes. They don't try to figure out the exact amount from January 1 to December 31.
TLDR: Add up all FLSA Premium ONLY from PP01 to PP26 and enter that amount into your taxes for correct OT deduction.
