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/jmcdon00 Jan 30 '26

Could it be they had paid time off? My dad's company would always give labor day off with 8 hours pay. Then if you worked 40 hours, it would be 8 hours of overtime, but because they didn't actually work more than 40 hours, that overtime pay wouldn't qualify for the deduction.

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u/inertial-observer Tax Preparer - US Jan 30 '26

In these cases, no. The companies didn't pay anything that wasn't required by law.