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No Tax on Overtime in Washington

No state tax

The federal deduction is federal — and Washington takes no state income tax, so here it reaches you whole.

On $9,195 of overtime premium

You save $2,023 — and Washington takes none of it

Worked on Washington's own average wage ($99,611, about $48/hour per BLS) with 8 overtime hours a week for 48 weeks. The OBBBA deduction cuts your federal tax. FICA is never touched: $703 of Social Security and Medicare on those hours.

No Tax on Overtime Calculator

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.

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
$62,331

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 $99,611 of straight-time pay in Washington, tax year 2026. The last row is the deduction cap.

Overtime premiumFederal savingWashington taxFICANet benefit
$2,000$440—−$153$440
$4,000$880—−$306$880
$6,000$1,320—−$459$1,320
$8,000$1,760—−$612$1,760
$12,500$2,750—−$956$2,750

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

Overtime and OBBBA in Washington

Does Washington tax my overtime in 2026?
No. Washington levies no state income tax, so your overtime only meets federal tax and FICA. The federal OBBBA deduction reaches you whole.
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 $703 in Social Security and Medicare on those hours regardless.
What do I actually save in Washington?
On $99,611 of straight-time pay plus $9,195 of overtime premium: $2,023 off your federal bill, with nothing clawed back at state level. Real net effect of the deduction: $2,023.
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

Oregon 9.9%California 9.3%Nevada no taxTexas no taxIdaho 5.8%All states →

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