Two earners, one limit
The calculator opens with a couple filing jointly on $168,000 of MAGI. One spouse worked 400 overtime hours at a regular rate of $36, paid at time and a half: $21,600 of overtime pay, of which $7,200 is the deductible half. The other spouse’s W-2 (or employer statement) shows $4,200 of qualified overtime, entered in Your spouse’s qualified overtime. Together that is $11,400, well under the couple’s $25,000 cap, and far below the $300,000 where the phase-out begins, so all of it is deductible.
Enter only the qualified part for your spouse: the “half” of time and a half, or the box 12 code TT amount from a 2026 W-2. If you only know your spouse’s total overtime pay, divide it by 3 at time and a half (the IRS method) before you enter it.
Where couples hit the limits
- The cap. Two people with heavy overtime can pass $25,000 together even though neither would pass $12,500 alone. The calculator shows what’s over the cap.
- The phase-out. It counts whole $1,000 steps of joint MAGI over $300,000: a couple at $320,500 loses $2,000 (20 steps), not $2,050. The table under the calculator shows the deduction at each income level for your figures.
- Filing separately. If a married couple files separately for any reason, neither spouse can claim this deduction, nor the tips or senior deductions. The car loan interest deduction is the one that still works on a separate return.
The saving for a couple
The estimate uses the joint brackets for 2026: by default your taxable income is joint MAGI minus the joint standard deduction, and the tax is compared with and without the deduction. If either of you is 65 or older, or you itemize, enter your taxable income instead so the estimate starts from the right place. Social Security and Medicare are still withheld from all overtime pay, and your state may tax it as before.
Joint return: the deduction by MAGI
For a couple’s combined qualified overtime of $10,000, $18,000, $25,000 (the cap is $25,000). Below $300,000 there is no reduction.
| Joint MAGI | $10,000 of overtime | $18,000 of overtime | $25,000 of overtime |
|---|---|---|---|
| $300,000 | $10,000 | $18,000 | $25,000 |
| $310,000 | $9,000 | $17,000 | $24,000 |
| $325,000 | $7,500 | $15,500 | $22,500 |
| $350,000 | $5,000 | $13,000 | $20,000 |
| $400,000 | $0 | $8,000 | $15,000 |
| $450,000 | $0 | $3,000 | $10,000 |
| $500,000 | $0 | $0 | $5,000 |
| $550,000 | $0 | $0 | $0 |