No Tax on Overtime in Virginia (2025-2028)

On $7,393 of overtime premium

You save $1,626, but Virginia takes back $429

Worked on Virginia's own average wage ($80,094, about $39/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 Virginia charges anyway. FICA is never touched: $566 of Social Security and Medicare on those hours.

Virginia keeps 26.0% of what the federal deduction gives back.

No Tax on Overtime Calculator

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

2025–2028

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: $58,951

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 $80,094 of straight-time pay in Virginia, tax year 2026. The last row is the deduction cap.

Overtime premium	Federal saving	Virginia tax	FICA	Net benefit
$2,000	$440	−$116	−$153	$324
$4,000	$880	−$232	−$306	$648
$6,000	$1,320	−$348	−$459	$972
$8,000	$1,760	−$464	−$612	$1,296
$12,500	$2,750	−$725	−$956	$2,025

Models the ordinary state income tax on those hours. Informational estimate, not tax advice.

Overtime and OBBBA in Virginia

Does Virginia tax my overtime in 2026?

Yes. The OBBBA deduction is federal: it cuts your federal tax, not your state base. Virginia still applies its 5.8% income tax to those hours, so you get $1,626 back federally while Virginia takes $429 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 $566 in Social Security and Medicare on those hours regardless.

What do I actually save in Virginia?

On $80,094 of straight-time pay plus $7,393 of overtime premium: $1,626 off your federal bill, less $429 that Virginia takes. Real net effect of the deduction: $1,198.

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

Maryland 5.8%North Carolina 4.5%West Virginia 6.5%Delaware 6.6%Tennessee no tax 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.