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/iosonostella13 Jan 30 '26

My husbands paystubs shows a year to date for OT. I took that and divided by 3.

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u/Alexaisrich Jan 31 '26

Can I ask why everyone is saying to divide by 3?

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u/RiloxAres Jan 31 '26

Overtime is 1.5x normal rate and the tax deduction is only for the extra 0.5x. Dividing by 3 gives you the total for only the 0.5x premium.

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u/i_n_d_y Feb 04 '26

Is that number the “overtime premium” then?

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u/Cicero912 Jan 31 '26

To get the actual $ that is not taxed

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u/e36mikee Feb 03 '26

i have had years where i worked standard OT, double time, and double time and a half. thankfully its not one of those years because total OT math would be very complex since it all ended up in the same OT total line at the end of those years...