If you earned overtime pay in 2025, you could see a bigger refund during the 2026 filing season based on a new tax break enacted via President Donald Trump’s “big beautiful bill.”
But missing details on tax forms, such as on your W-2 from an employer, could be confusing when filing returns this year, experts say.
The “no tax on overtime” deduction allows certain workers to deduct up to $12,500 for single filers or $25,000 for married couples filing jointly per year from 2025 through 2028. The tax break starts to phase out, or get smaller, when earnings exceed $150,000 for single filers or $300,000 for joint filers.
For 2025, your employer isn’t required to separate overtime from regular pay on Forms W-2, 1099-NEC or 1099-MISC. That means you’ll need to calculate qualified overtime on your own during the 2026 season.
“Treasury gave employers a year off [from reporting],” said certified financial planner Micha Siegel, founder of TaxCentric, an advisory firm in Fair Lawn, New Jersey. “But that makes it really hard for taxpayers.”
