When is this effective? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe effective date was January 1, 2025. This deduction is effective for calendar years 2025 through 2028.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Who qualifies? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nEmployees who receive overtime pay under Section 7 of the Fair Labors Standards Act (FLSA). This applies to NAU employees who are hourly and entitled to 1.5 times their hourly rate for hours physically worked over 40 in a week.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I see reduced federal taxes on my paycheck? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo, overtime wages are still subject to withholding taxes (Social Security, Medicare, etc.). The deduction applies when an employee files their tax return.<\/p>\n
NAU is still required to withhold federal income taxes based on the employee’s W-4 elections.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n What earnings qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe only qualified earnings are those associated with the FLSA defined overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do the full overtime earnings (1.5 X the hourly rate) count toward the deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo, only the “half” portion (.5) of the overtime qualifies for the deduction and is labeled as “premium overtime.”<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How is the deduction claimed? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe deduction is claimed when an employee files their tax return. This is an above-the-line deduction, meaning it is available regardless of if an individual itemizes their deductions or not.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Is there a deduction limit? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, the maximum deduction is $12,500 for single filters and $25,000 for joint filters.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How do I determine my overtime deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nFind the total amount of overtime pay<\/strong> you earned this year.<\/p>\nExample<\/strong>:
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n(Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n
\n- Overtime pay = 100 hours × $30 = $3,000<\/li>\n
- Regular pay portion = 100 × $20 = $2,000<\/li>\n
- Premium portion<\/strong>= $3,000 – $2,000 = $1,000<\/strong> (this is deductible)<\/li>\n<\/ul>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n\n \n \n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n
![](\"https:\/\/in.nau.edu\/wp-content\/uploads\/sites\/5\/2026\/01\/Overtime-Paycheck-Example.jpg\")
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Does the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n
The effective date was January 1, 2025. This deduction is effective for calendar years 2025 through 2028.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
Who qualifies? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nEmployees who receive overtime pay under Section 7 of the Fair Labors Standards Act (FLSA). This applies to NAU employees who are hourly and entitled to 1.5 times their hourly rate for hours physically worked over 40 in a week.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I see reduced federal taxes on my paycheck? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo, overtime wages are still subject to withholding taxes (Social Security, Medicare, etc.). The deduction applies when an employee files their tax return.<\/p>\n
NAU is still required to withhold federal income taxes based on the employee’s W-4 elections.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n What earnings qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe only qualified earnings are those associated with the FLSA defined overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do the full overtime earnings (1.5 X the hourly rate) count toward the deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo, only the “half” portion (.5) of the overtime qualifies for the deduction and is labeled as “premium overtime.”<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How is the deduction claimed? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe deduction is claimed when an employee files their tax return. This is an above-the-line deduction, meaning it is available regardless of if an individual itemizes their deductions or not.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Is there a deduction limit? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, the maximum deduction is $12,500 for single filters and $25,000 for joint filters.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How do I determine my overtime deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nFind the total amount of overtime pay<\/strong> you earned this year.<\/p>\nExample<\/strong>:
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n(Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n
\n- Overtime pay = 100 hours × $30 = $3,000<\/li>\n
- Regular pay portion = 100 × $20 = $2,000<\/li>\n
- Premium portion<\/strong>= $3,000 – $2,000 = $1,000<\/strong> (this is deductible)<\/li>\n<\/ul>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n\n \n \n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Does the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n
Employees who receive overtime pay under Section 7 of the Fair Labors Standards Act (FLSA). This applies to NAU employees who are hourly and entitled to 1.5 times their hourly rate for hours physically worked over 40 in a week.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
Will I see reduced federal taxes on my paycheck? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo, overtime wages are still subject to withholding taxes (Social Security, Medicare, etc.). The deduction applies when an employee files their tax return.<\/p>\n
NAU is still required to withhold federal income taxes based on the employee’s W-4 elections.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n What earnings qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe only qualified earnings are those associated with the FLSA defined overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do the full overtime earnings (1.5 X the hourly rate) count toward the deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo, only the “half” portion (.5) of the overtime qualifies for the deduction and is labeled as “premium overtime.”<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How is the deduction claimed? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe deduction is claimed when an employee files their tax return. This is an above-the-line deduction, meaning it is available regardless of if an individual itemizes their deductions or not.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Is there a deduction limit? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, the maximum deduction is $12,500 for single filters and $25,000 for joint filters.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How do I determine my overtime deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nFind the total amount of overtime pay<\/strong> you earned this year.<\/p>\nExample<\/strong>:
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n(Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n
\n- Overtime pay = 100 hours × $30 = $3,000<\/li>\n
- Regular pay portion = 100 × $20 = $2,000<\/li>\n
- Premium portion<\/strong>= $3,000 – $2,000 = $1,000<\/strong> (this is deductible)<\/li>\n<\/ul>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n\n \n \n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Does the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n
No, overtime wages are still subject to withholding taxes (Social Security, Medicare, etc.). The deduction applies when an employee files their tax return.<\/p>\n
NAU is still required to withhold federal income taxes based on the employee’s W-4 elections.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
What earnings qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe only qualified earnings are those associated with the FLSA defined overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do the full overtime earnings (1.5 X the hourly rate) count toward the deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo, only the “half” portion (.5) of the overtime qualifies for the deduction and is labeled as “premium overtime.”<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How is the deduction claimed? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe deduction is claimed when an employee files their tax return. This is an above-the-line deduction, meaning it is available regardless of if an individual itemizes their deductions or not.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Is there a deduction limit? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, the maximum deduction is $12,500 for single filters and $25,000 for joint filters.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How do I determine my overtime deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nFind the total amount of overtime pay<\/strong> you earned this year.<\/p>\nExample<\/strong>:
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n(Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n
\n- Overtime pay = 100 hours × $30 = $3,000<\/li>\n
- Regular pay portion = 100 × $20 = $2,000<\/li>\n
- Premium portion<\/strong>= $3,000 – $2,000 = $1,000<\/strong> (this is deductible)<\/li>\n<\/ul>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n\n \n \n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Does the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n
The only qualified earnings are those associated with the FLSA defined overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
Do the full overtime earnings (1.5 X the hourly rate) count toward the deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo, only the “half” portion (.5) of the overtime qualifies for the deduction and is labeled as “premium overtime.”<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How is the deduction claimed? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe deduction is claimed when an employee files their tax return. This is an above-the-line deduction, meaning it is available regardless of if an individual itemizes their deductions or not.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Is there a deduction limit? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, the maximum deduction is $12,500 for single filters and $25,000 for joint filters.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How do I determine my overtime deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nFind the total amount of overtime pay<\/strong> you earned this year.<\/p>\nExample<\/strong>:
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n(Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n
\n- Overtime pay = 100 hours × $30 = $3,000<\/li>\n
- Regular pay portion = 100 × $20 = $2,000<\/li>\n
- Premium portion<\/strong>= $3,000 – $2,000 = $1,000<\/strong> (this is deductible)<\/li>\n<\/ul>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n\n \n \n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Does the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n
No, only the “half” portion (.5) of the overtime qualifies for the deduction and is labeled as “premium overtime.”<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
How is the deduction claimed? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nThe deduction is claimed when an employee files their tax return. This is an above-the-line deduction, meaning it is available regardless of if an individual itemizes their deductions or not.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Is there a deduction limit? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, the maximum deduction is $12,500 for single filters and $25,000 for joint filters.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How do I determine my overtime deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nFind the total amount of overtime pay<\/strong> you earned this year.<\/p>\nExample<\/strong>:
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n(Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n
\n- Overtime pay = 100 hours × $30 = $3,000<\/li>\n
- Regular pay portion = 100 × $20 = $2,000<\/li>\n
- Premium portion<\/strong>= $3,000 – $2,000 = $1,000<\/strong> (this is deductible)<\/li>\n<\/ul>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n\n \n \n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Does the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n
The deduction is claimed when an employee files their tax return. This is an above-the-line deduction, meaning it is available regardless of if an individual itemizes their deductions or not.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
Is there a deduction limit? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, the maximum deduction is $12,500 for single filters and $25,000 for joint filters.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n How do I determine my overtime deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nFind the total amount of overtime pay<\/strong> you earned this year.<\/p>\nExample<\/strong>:
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n(Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n
\n- Overtime pay = 100 hours × $30 = $3,000<\/li>\n
- Regular pay portion = 100 × $20 = $2,000<\/li>\n
- Premium portion<\/strong>= $3,000 – $2,000 = $1,000<\/strong> (this is deductible)<\/li>\n<\/ul>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n\n \n \n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Does the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n
Yes, the maximum deduction is $12,500 for single filters and $25,000 for joint filters.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
How do I determine my overtime deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nFind the total amount of overtime pay<\/strong> you earned this year.<\/p>\nExample<\/strong>:
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n(Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n
\n- Overtime pay = 100 hours × $30 = $3,000<\/li>\n
- Regular pay portion = 100 × $20 = $2,000<\/li>\n
- Premium portion<\/strong>= $3,000 – $2,000 = $1,000<\/strong> (this is deductible)<\/li>\n<\/ul>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n\n \n \n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nNo FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n \n Does the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n \n \n\nYes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\n \n
Find the total amount of overtime pay<\/strong> you earned this year.<\/p>\n Example<\/strong>: (Regular rate of pay at $20 per hour, 1.5 x $20 = $30 OT Rate)<\/p>\n Yes, for non-exempt employees, supplemental pay is considered overtime compensation and is paid at 1.5 times your hourly rate so the .5 is considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n No FLSA Exempt employees do not qualify for overtime, so the deduction does not apply.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n Yes, each employee with qualifying overtime will receive a notice that they have “premium” overtime. Your final paycheck of 2025, issued on 12\/26\/2025, contains the following information which is the amount of your “premium” overtime for 2025.<\/p>\n Yes, per the IRS, one-third of this pay is considered “premium” overtime, additionally, when employees are paid out for accrued comp time one-third of this pay is also considered “premium” overtime.<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\n
\nIf your regular rate is $20\/hour and you work 100 overtime hours.<\/p>\n\n
Does supplemental pay qualify for the deduction? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n
Do FLSA Exempt employees qualify for any overtime deductions? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n
Will I receive a notification from NAU stating my qualified overtime deduction amount? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n
<\/p>\n<\/body><\/html>\n\n <\/div>\n<\/div>\n\n\nDoes the deduction apply when I use my accrued comp time? Accordion Closed<\/span><\/h4>\n <\/span>\n <\/div>\n <\/a>\n