Just to confirm, this new deduction is only for non-exempt and hourly employees?
Wife is a nurse practitioner and is exempt but she can work more than 40 hours a week to get overtime pay. I believe it is a flat OT rate, not time and a half. Her last paystub does list out the amount of OT she has worked last year.
New deduction for qualified overtime compensation question
byu/kimcheepower intax
Posted by kimcheepower
5 Comments
Only the premium is deductible, so if the OT hours are paid at the standard rate there is nothing to deduct.
the deduction only applies to the “and a half” portion of overtime, so if she isn’t getting “and a half” then there is nothing to deduct.
It would need to be FLSA overtime, which is time-and-a-half for over 40 WORKED hours per week.
also employers weren’t required to report this on W2 in 2025, so…. you’d have to calculate THE QUALIFIED OVT if it is not on the W2.
As others have stated, it is the amount of pay in excess of the standard rate (up to 50%) for hours actually worked beyond 40 hours in each week for any employee who is not considered exempt by the FLSA definitions.