No Tax on Overtime?

Not so fast. Effective for 2025 through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay - such as the "half" portion of "time-and-a-half", and that is reported on a Form W-2, Form 1099, or other specified statement issued to the individual.

The maximum annual deduction is $12,500, or $25,000 for joint filers.

The deduction phases out with MAGI over $150,000, or $300,000 for joint filers.

If married, you must file jointly to claim the deduction.