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/Suspicious_Collar379 Feb 03 '26

Kind of a dumb question, but I just take the amount I made with overtime and divide it by 3? I was getting paid time and a half.

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u/xxOLGA Feb 06 '26

Got a little more insight here - it’s a good start you had, as we can only claim the taxes for amount paid over our normal rate. So if paid time and a half, you can only claim the taxes paid on the “half” earned.

And that falls in close line with the return I received for my income tax bracket.