Before the One Big Beautiful Bill Act (OBBBA), your overtime income was fully taxable for federal income tax purposes.

Beginning this year (2025) and continuing through 2028, the OBBBA establishes a new temporary deduction that can offset up to $12,500 of qualified overtime income each year, or $25,000 if you’re a married joint-filer.

Here’s what you need to know about what could potentially be a sweet tax-saving deal for you.

Overtime Deduction Basics

The new overtime deduction can be claimed whether you itemize or not.1

The deduction is intended to fulfill President Trump’s campaign promise of “no tax on overtime.”

While the new deduction ... Log in to view full article.