About the No Tax on Tips & Overtime Calculator
From 2025 to 2028, workers can deduct qualified tips of up to $25,000 a year and the premium part of overtime pay — the extra half in time-and-a-half — of up to $12,500 ($25,000 for married couples filing jointly). You get both deductions whether you take the standard deduction or itemize.
The deductions shrink by $100 for every $1,000 of income above $150,000 ($300,000 joint). They cut federal income tax only: Social Security, Medicare and most state income taxes still apply. Married people must file jointly to claim them.