MyPayCal
ENES

No Tax on Overtime in Delaware

2.2%–6.6%

The deduction is federal. Delaware still charges its own tax on those same hours.

On $6,960 of overtime premium

You save $1,531, but Delaware takes back $459

Worked on Delaware's own average wage ($75,405, about $36/hour per BLS) with 8 overtime hours a week for 48 weeks. The OBBBA deduction cuts your federal tax, but not your state base, so Delaware charges anyway. FICA is never touched: $532 of Social Security and Medicare on those hours.

Delaware keeps 30.0% of what the federal deduction gives back.

What the new federal overtime deduction actually saves you — and what it does not.

2025–2028

Federal tax saved: $1,183. FICA still owed on that overtime: $1,234.

Federal tax saved
per year, at filing
$1,234FICA still owed on it
7.65% of your overtime — the deduction does not touch it

Of your $16,128 overtime pay a year

  • $12,278You keep76.1%
  • $1,539Federal9.5%
  • $1,234FICA7.7%
  • $1,012State6.3%
  • $65State programs0.4%
Enter your overtime
Filing status
Overtime pay for the year (gross)
$16,128
Qualifying premium (the half of time-and-a-half)
$5,376
Deduction applied (Schedule 1-A)
$5,376
Federal tax without the deduction
$7,531
Federal tax with the deduction
$6,348
Take-home for the year
$58,466

Estimates only. Not tax or legal advice. Consult a professional. Models FLSA time-and-a-half: the deductible premium is half your regular rate per overtime hour, capped and phased out per Schedule 1-A.

How the split moves with your overtime

Single filer on $75,405 of straight-time pay in Delaware, tax year 2026. The last row is the deduction cap.

Overtime premiumFederal savingDelaware taxFICANet benefit
$2,000$440−$132−$153$308
$4,000$880−$264−$306$616
$6,000$1,320−$396−$459$924
$8,000$1,760−$528−$612$1,232
$12,500$2,750−$825−$956$1,925

Applies Delaware's income tax, which for 2026 is not reduced by the deduction. Informational estimate, not tax advice.

Overtime and OBBBA in Delaware

Does Delaware tax my overtime in 2026?
Yes. Delaware doesn't let the OBBBA deduction reduce its own tax for 2026, so it still applies its income tax (2.2%–6.6%) to those hours: you get $1,531 back federally while Delaware takes $459 of the very same hours.
So is overtime actually tax-free?
Not quite, and the name oversells it. The deduction covers only the PREMIUM half of time-and-a-half, caps at $12,500 for a single filer, phases out above $150,000 of income, and never touches FICA: in this example you pay $532 in Social Security and Medicare on those hours regardless.
What do I actually save in Delaware?
On $75,405 of straight-time pay plus $6,960 of overtime premium: $1,531 off your federal bill, less $459 that Delaware takes. Real net effect of the deduction: $1,072.
Where does this show up on my W-2?
Your employer reports qualified overtime in W-2 box 12 under code TT. That figure is what carries to Schedule 1-A; if the box is empty, ask your employer to correct it before you file.

Compare with nearby states

New Jersey 1.4%–10.75%Maryland 2%–6.5%Pennsylvania 3.07%New York 3.9%–10.9%Virginia 2%–5.75%All states

Free PDF: 10 Hidden Tax Hacks for US Workers

Specific dollar-impact tactics worth $1,000–$15,000/year. Bilingual EN/ES. Drop your email and we'll send the PDF instantly.

No spam. Unsubscribe anytime.