Effective January 1, 2025, through December 31, 2025, through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay as required by the Fair Labor Standards Act (FLSA) and that is reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.
The maximum annual deduction is $12,500 ($25,000 for joint filers).
The deduction is phased out for taxpayers with modified adjusted gross income of over $150,000 ($300,000 for joint filers).
Employers and other payors must file information returns with the IRS (or SSA) and furnish Form W-2, Form 1099, or other specified statements to taxpayers showing the total amount of qualified overtime compensation paid during the year.
If you would like a free consultation about how changes to the 2025 taxes affects your return, feel free to call us at (631-585-9698.
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