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Index/Topics/FLSA Overtime Deduction 2025-2028

FLSA Overtime Deduction 2025-2028

The IRS issued transition relief for 2025 that lets employers furnish qualified overtime amounts by a reasonable method while mandatory, standardized W-2 reporting is expected beginning in 2026.

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Jan 5, 2026
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How should overtime premiums vs. regular overtime pay be reported on W-2 and payroll records?

For tax years 2025–2028, only the premium portion of FLSA overtime—the “half” in time-and-a-half—qualifies for the new deduction and must be tracked as “qualified overtime compensation” even though 20...