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No Tax on Overtime in Georgia

4.99%

Georgia applies the deduction to its own tax as well, up to $1,750 of the premium; the rest is taxed as usual.

On $6,742 of overtime premium

You save $1,483, but Georgia takes back $249

Worked on Georgia's own average wage ($73,035, about $35/hour per BLS) with 8 overtime hours a week for 48 weeks. The OBBBA deduction cuts your federal tax and your Georgia tax too. FICA is never touched: $516 of Social Security and Medicare on those hours.

Georgia keeps 17.0% 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

  • $12,637You keep78.4%
  • $1,539Federal9.5%
  • $1,234FICA7.7%
  • $717State4.4%
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
$59,455

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 $73,035 of straight-time pay in Georgia, tax year 2026. The last row is the deduction cap.

Overtime premiumFederal savingGeorgia savingGeorgia taxFICANet benefit
$2,000$440$87−$12−$153$515
$4,000$880$87−$112−$306$855
$6,000$1,320$87−$212−$459$1,195
$8,000$1,760$87−$312−$612$1,535
$12,500$2,750$87−$536−$956$2,301

Applies Georgia's 2026 treatment, which allows the deduction on its own return up to $1,750. Informational estimate, not tax advice.

Overtime and OBBBA in Georgia

Does Georgia tax my overtime in 2026?
Only above its cap. Georgia allows the OBBBA deduction on its 2026 return up to $1,750, so that part of the premium also comes off your Georgia tax: you save $1,483 federal and $87 state. Georgia still taxes $249 on the premium above its cap.
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 $516 in Social Security and Medicare on those hours regardless.
What do I actually save in Georgia?
On $73,035 of straight-time pay plus $6,742 of overtime premium: $1,483 off your federal bill, plus $87 off your Georgia tax, less $249 Georgia still charges above its cap. Real net effect of the deduction: $1,321.
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

South Carolina 1.99%–5.21%Alabama 2%–5%North Carolina 3.99%Tennessee no taxFlorida no taxAll states

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