Qualified Overtime

Employer workflow

Qualified overtime tracking setup for employers

Create a cleaner process for identifying covered, nonexempt overtime records, documenting methods, and answering year-end questions.

Request tracking setup helpReview employee tracking workflow

Not affiliated with the IRS, Treasury, Department of Labor, payroll providers, or tax software vendors. For educational and tracking purposes only.

Illustration of payroll export, method notes, question card, and handoff packet connected in a workflow.

Employer use cases

Payroll statement review

Map how regular rate, overtime hours, overtime rate, and annual statements are presented across payroll exports.

Employee support

Prepare a consistent response path for employees asking about 2025 W-2 Box 14 transition records, 2026 Box 12 code TT reporting, portal statements, or qualified overtime amounts.

Preparer handoff

Create a clean summary that helps outside tax professionals understand what the employer can and cannot confirm.

Illustration of payroll export, method notes, question card, and handoff packet connected in a workflow.

Important boundaries for employer tracking

  • Do not treat every premium, bonus, or state-law overtime rule as qualified overtime without FLSA review.
  • Escalate exemption, classification, regular-rate, and collective-bargaining questions to the appropriate professional.
  • Keep payroll records in employer-approved systems. This first release does not store employee payroll records.
  • Maintain clear language that the employer is not giving employees personal tax advice.

Request tracking setup help

Use the inquiry form to describe payroll provider, hourly employee count, tax year, and the tracking problem you need to solve.

Do not send sensitive payroll files through this form. Use employer-approved secure systems for employee records.

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Official sources

Source baseline checked 2026-07-31

Review the official guidance directly

IRS FAQ: Qualified overtime compensation deduction

Defines qualified overtime compensation, FLSA overtime eligibility, deduction limits, reporting rules, and taxpayer requirements.

Internal Revenue Service | FAQ

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IRS overview: No Tax on Overtime deduction

Summarizes the deduction cap, MAGI phase-out thresholds, Social Security number rule, and 2025 reporting note.

Internal Revenue Service | Overview

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IRS Notice 2025-69

Provides 2025 methods for individuals estimating qualified overtime compensation when separate reporting is not available.

Internal Revenue Service | Notice

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2026 Instructions for Forms W-2 and W-3

Explains 2026 Form W-2 reporting, including Box 12 code TT for qualified overtime compensation.

Internal Revenue Service | Instructions

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DOL overtime overview

Explains the FLSA overtime baseline for covered, nonexempt employees working over 40 hours in a workweek.

U.S. Department of Labor | Guidance

View official source