economy
March 6, 2026
As millions claim Trump's 'no tax on overtime' deduction, filers risk mistakes, experts say
Millions have claimed President Donald Trump's "no tax on overtime" deduction. But there could be filing mistakes, according to tax experts.
TL;DR
- Millions of taxpayers have filed for Trump's "no tax on overtime" deduction.
- The deduction allows up to $12,500 (single) or $25,000 (married) to be deducted annually from 2025-2028.
- The deduction is for overtime earnings covered under the Fair Labor Standards Act (FLSA).
- The IRS has waived employer reporting requirements for tax year 2025, creating potential calculation confusion.
- Workers may need payroll statements to calculate the 'overtime premium,' which is half of the overtime pay rate.
- Experts worry about filers overstating deductions or making honest mistakes due to unclear reporting.
- Overtime pay is concentrated in sectors like manufacturing, healthcare, transportation, and public safety.
- Only a small percentage of eligible workers regularly receive FLSA-qualified overtime.
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