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No Tax on Overtime in Montana

4.7%–5.65%

Montana applies the deduction to its own tax as well — the premium escapes both.

On $5,808 of overtime premium

You save $919 federal and $322 in Montana

Worked on Montana's own average wage ($62,915, about $30/hour per BLS) with 8 overtime hours a week for 48 weeks. The OBBBA deduction cuts your federal tax and your Montana tax too. FICA is never touched: $444 of Social Security and Medicare on those hours.

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

  • $12,798You keep79.4%
  • $1,539Federal9.5%
  • $1,234FICA7.6%
  • $557State3.5%
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
$59,793

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 $62,915 of straight-time pay in Montana, tax year 2026. The last row is the deduction cap.

Overtime premiumFederal savingMontana savingMontana taxFICANet benefit
$2,000$240$107—−$153$347
$4,000$522$220—−$306$741
$6,000$962$333—−$459$1,294
$8,000$1,402$446—−$612$1,847
$12,500$2,392$700—−$956$3,091

Applies Montana's 2026 treatment, which allows the deduction on its own return. Informational estimate, not tax advice.

Overtime and OBBBA in Montana

Does Montana tax my overtime in 2026?
Not on the premium. Montana allows the OBBBA deduction on its 2026 return, so that part of the premium also comes off your Montana tax: you save $919 federal and $322 state. Straight-time pay for those hours is taxed as usual.
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 $444 in Social Security and Medicare on those hours regardless.
What do I actually save in Montana?
On $62,915 of straight-time pay plus $5,808 of overtime premium: $919 off your federal bill, plus $322 off your Montana tax. Real net effect of the deduction: $1,241.
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

Idaho 5.3%Wyoming no taxNorth Dakota 1.95%–2.5%South Dakota no taxUtah 4.45%All states

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