Overtime News & Analysis

IRS Updates Overtime Tax Break Rules for 2026 Tax Year

The IRS has clarified rules for the 'no tax on overtime' deduction for the 2026 tax year, making it easier for eligible workers to claim this benefit. Employers will now be required to include relevant information on W-2s, which will simplify the process compared to filing for 2025. Eligible single filers can deduct up to $12,500, while married couples can deduct up to $25,000 on qualifying overtime pay. This change may help ensure taxpayers can more easily access the tax break, impacting their financial planning and tax returns.