Schedule1ADesk / 2026 Tax & Payroll Guides / Salaried Non-Exempt Employee Fluctuating Workweek W-2 Code TT Calculator
Salaried Non-Exempt Employee Fluctuating Workweek W-2 Code TT Calculator
How much is the 2026 overtime tax deduction for Salaried Non-Exempt Employee?
At $29/hour working 8 FLSA overtime hours per week for 50 weeks, your gross 1.5x overtime pay is $17,400, and your qualified 0.5x half-time overtime premium (reported in 2026 Form W-2 Box 12, Code TT) is $5,800, saving roughly $1,276 in federal tax.
Under Public Law 119-21 (IRS Schedule 1-A, Part III), the 2026 "No Tax on Overtime" deduction applies strictly to the FLSA-required 0.5x half-time premium portion of time-and-a-half pay for hours worked over 40 in a workweek. For 2026, your employer must report this exact 0.5x amount in Form W-2, Box 12, Code TT.
Open Pre-Filled $29/hr (8 OT Hrs/Wk) Schedule 1-A PDF Worksheet
2026 Paystub-to-W-2 Box 12 Code TT Breakdown (Salaried Non-Exempt Employee)
| Overtime Pay Component | Weekly Amount (8 OT Hrs) | Annual Amount (50 Weeks) | 2026 Tax Treatment |
|---|---|---|---|
| Regular Base Rate (1.0x Straight-Time Portion) | $232 ($29/hr x 8h) | $11,600 | Taxed as normal W-2 Box 1 wages (Excluded from Code TT) |
| FLSA Half-Time Premium (0.5x Multiplier) | $116 ($14.50/hr x 8h) | $5,800 | Reported in W-2 Box 12 Code TT · Deductible on Schedule 1-A |
| Total Time-and-a-Half Overtime Pay (1.5x) | $348 ($43.50/hr x 8h) | $17,400 | Subject to normal 7.65% FICA (Social Security & Medicare) |
| Allowed Schedule 1-A Part III Deduction | N/A | $5,800 (Single Cap $12,500 / MFJ $25,000) | Saves ~$1,276/yr in the 22% federal bracket |
Frequently Asked Questions
Why is my W-2 Box 12 Code TT only one-third of my total 1.5x overtime pay at $29/hour?
Because the federal FLSA overtime deduction only exempts the 0.5x half-time premium ($14.50/hr) above your regular $29/hr base wage, which equals exactly one-third of your $43.50/hr time-and-a-half pay.
What is the maximum 2026 Schedule 1-A overtime deduction cap?
The maximum deduction is $12,500 for Single and Head of Household filers, and $25,000 for Married Filing Jointly, phasing out above $150,000 ($300,000 MFJ) MAGI.