ExamNoOvertimeTax

2025 federal return calculator · Reviewed September 12, 2026

Overtime deduction income limit

The deduction starts phasing out when Schedule 1-A modified adjusted gross income exceeds $150,000, or $300,000 for a joint return. Enter the qualified premium, not gross overtime pay, to see the form math.

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IRS Schedule 1-A2025 Form 1040 instructionsIRS FS-2026-13

Calculate the 2025 limit

This reproduces Schedule 1-A Part III, lines 15 through 21. It does not decide whether compensation qualifies.

Use the FLSA-required premium. For ordinary time-and-a-half, this is generally the extra half, not the whole overtime paycheck.

Use Schedule 1-A line 3. It can differ from the AGI printed on Form 1040. Enter a nonnegative amount.

A married taxpayer must file jointly to claim this deduction under the published 2025 instructions.

How the income phaseout works

First, Schedule 1-A limits qualified overtime compensation to $12,500 for most eligible returns or $25,000 for married filing jointly. Then it compares MAGI with the filing-status threshold. The published 2025 form reduces the capped amount by $100 for each complete $1,000 above the threshold.

The form rounds down the number of $1,000 steps. At $150,999 of MAGI on a non-joint eligible return, line 19 is zero and no phaseout applies. At $151,000, line 19 is one and the deduction falls by $100. The calculator follows the form as published.

The phaseout does not determine the amount of qualified compensation. It applies only after you identify compensation paid under section 7 of the Fair Labor Standards Act that exceeds the regular rate. The IRS says ordinary time-and-a-half generally contributes the extra half portion. State-only overtime, voluntary holiday premiums without FLSA overtime, and pay above the FLSA requirement generally do not increase the qualified amount.

What MAGI means on Schedule 1-A

For the 2025 form, Schedule 1-A Part I begins with Form 1040, 1040-SR, or 1040-NR line 11b. It then adds certain excluded income from Puerto Rico and amounts from Forms 2555 and 4563. The total on Schedule 1-A line 3 is the MAGI used for this phaseout.

Do not substitute taxable income, gross wages, or household pay for line 3. If none of the additions in Part I applies, MAGI may equal the line 11b starting amount. If one applies, the form’s MAGI will be higher.

Phaseout examples

Swipe the table sideways to see every column.

Illustrations using the published 2025 Schedule 1-A method
Filing statusQualified amountMAGICalculationDeduction
Single$6,000$149,000Below $150,000 threshold$6,000
Single$6,000$168,500$6,000 minus 18 × $100$4,200
Single$20,000$160,000$12,500 cap minus 10 × $100$11,500
Joint$25,000$325,000$25,000 minus 25 × $100$22,500
Married filing separately$6,000$100,000Filing status is ineligible$0

Each example isolates the Part III limit. It assumes the entered compensation is qualified, properly reported, and supported by the taxpayer’s records. It does not estimate tax saved because that depends on the full return and marginal tax rates.

Before you use the result

  1. Confirm the compensation is the FLSA-required premium and is included in income.
  2. Use the reporting amount or a reasonable method permitted by the instructions for the relevant tax year.
  3. Complete Schedule 1-A Part I before applying the MAGI threshold.
  4. Check the official form and instructions for the year being filed. This calculator currently models the published 2025 form.
  5. Keep payroll records and any employer statement used to support the amount.
Walk through Schedule 1-AMap the qualified amount and phaseout to Part III lines 14a through 21.Check a Code TT amountReconstruct ordinary workweeks and prepare a payroll correction inquiry.Separate double-time paySee why employer premium above the FLSA requirement is treated separately.Test basic eligibilityStart with the site’s source-backed qualified overtime guide.