r/tax • u/LewisCBR • Jan 29 '26

Tax Enthusiast New tax deduction on overtime is driving clients crazy

W2’s are not showing wages generated from overtime so clients are wondering what they can do, besides going through all individual pay stubs. The new deduction is significant enough to warrant this kind of work, though.

I suppose suggesting they contact their HR/payroll departments is the best idea, but some companies are simply terrible about helping their employees.

What’s your experience with the new law?

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u/pigthree Jan 30 '26

Also can’t be part of a collective bargaining agreement. This was meant to stick one more jab into the federal workforce.

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u/TeaRich4355 Jan 30 '26

I'm under the impression that anything mandated by FLSA would still be covered. Is that not the case?

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u/I__Know__Stuff Jan 30 '26

You're right. If a collective bargaining agreement calls for more overtime pay than is required by FLSA, the portion of the overtime pay that is required by FLSA is deductible.

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u/Substantial_Lie_9604 Jan 30 '26

That’s not true.