Year by year
| Overtime earned in | Claimed on | Where the amount comes from |
|---|---|---|
| 2025 | Your 2025 return, filed in 2026 | Pay stubs or a year-end payroll summary |
| 2026 | Your 2026 return, due April 15, 2027 | W-2 box 12, code TT |
| 2027 | Your 2027 return, filed in 2028 | W-2 box 12, code TT |
| 2028 | Your 2028 return, filed in 2029 | W-2 box 12, code TT |
The deduction ends after the 2028 tax year unless Congress extends it.
Overtime from before July 4, 2025 counts
The law took effect for tax years beginning after December 31, 2024. Overtime you earned in January through June 2025 qualifies the same as overtime earned after the law was signed.
2025 was a transition year
Employers didn't have to report qualified overtime separately on 2025 W-2s. IRS Notice 2025-69 lets you work out the amount from pay stubs or payroll records: if your stub shows the overtime premium, use it; if it shows only total overtime pay at time-and-a-half, use one third of that total.
If you filed your 2025 return without the deduction, you can claim it by filing an amended return, Form 1040-X. You generally have three years from the original filing date.
From 2026, it's on your W-2
For 2026 and later years, employers must report qualified overtime on the W-2 in box 12 with code TT. The IRS says employees generally may claim only the amount reported there, so check that box when your W-2 arrives in January 2027.
Your paycheck doesn't change
Employers keep withholding federal income tax on overtime as before. The saving shows up when you file. If you'd rather see it during the year, you can account for the expected deduction on a new Form W-4.
Updated November 3, 2026. Sources: Internal Revenue Code §225, IRS Notice 2025-69, IRS questions and answers on the qualified overtime deduction (FS-2026-13), IRS Fact Sheet 2025-03.