No Tax on Overtime in Missouri (2025-2028)

On $6,133 of overtime premium

You save $1,344, but Missouri takes back $298

Worked on Missouri's own average wage ($66,446, about $32/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 Missouri charges anyway. Missouri lets you deduct federal income tax, and the overtime deduction shrinks your federal bill, so that deduction shrinks too: net, $9 more Missouri tax. FICA is never touched: $469 of Social Security and Medicare on those hours.

Missouri keeps 22.0% 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

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

$12,608You keep78.2%
$1,539Federal9.5%
$1,234FICA7.7%
$747State4.6%

Enter your overtime

Regular hourly rate

Overtime hours per week

Weeks of overtime per year

Filing status

State (for state tax)

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: $59,817

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 $66,446 of straight-time pay in Missouri, tax year 2026. The last row is the deduction cap.

Overtime premium	Federal saving	Missouri tax	FICA	Net benefit
$2,000	$435	−$97	−$153	$338
$4,000	$875	−$194	−$306	$680
$6,000	$1,315	−$291	−$459	$1,023
$8,000	$1,755	−$388	−$612	$1,366
$12,500	$2,745	−$607	−$956	$2,138

Applies Missouri's income tax, which for 2026 is not reduced by the deduction. The Missouri tax column includes the extra tax from Missouri's deduction for federal income tax, which shrinks with your federal bill. Informational estimate, not tax advice.

Overtime and OBBBA in Missouri

Does Missouri tax my overtime in 2026?

Yes. Missouri doesn't let the OBBBA deduction reduce its own tax for 2026, so it still applies its income tax (2%–4.7%) to those hours: you get $1,344 back federally while Missouri takes $288 of the very same hours. Missouri lets you deduct federal income tax, and the overtime deduction shrinks your federal bill, so that deduction shrinks too: net, $9 more Missouri tax.

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 $469 in Social Security and Medicare on those hours regardless.

What do I actually save in Missouri?

On $66,446 of straight-time pay plus $6,133 of overtime premium: $1,344 off your federal bill, less $298 that Missouri takes ($288 on the premium and $9 as its deduction for federal tax shrinks). Real net effect of the deduction: $1,046.

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

Kansas 5.2%–5.58%Illinois 4.95%Arkansas 2%–3.7%Iowa 3.8%Tennessee no tax All states

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