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No Tax on Overtime in Wisconsin

7.6%

The deduction is federal. Wisconsin still charges its own tax on those same hours.

On $6,108 of overtime premium

You save $1,311, but Wisconsin takes back $464

Worked on Wisconsin's own average wage ($66,172, 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 Wisconsin charges anyway. FICA is never touched: $467 of Social Security and Medicare on those hours.

Wisconsin keeps 35.0% 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
$

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
$57,902

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 $66,172 of straight-time pay in Wisconsin, tax year 2026. The last row is the deduction cap.

Overtime premiumFederal savingWisconsin taxFICANet benefit
$2,000$407−$152−$153$255
$4,000$847−$304−$306$543
$6,000$1,287−$456−$459$831
$8,000$1,727−$608−$612$1,119
$12,500$2,717−$950−$956$1,767

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

Overtime and OBBBA in Wisconsin

Does Wisconsin tax my overtime in 2026?
Yes. The OBBBA deduction is federal: it cuts your federal tax, not your state base. Wisconsin still applies its 7.6% income tax to those hours, so you get $1,311 back federally while Wisconsin takes $464 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 $467 in Social Security and Medicare on those hours regardless.
What do I actually save in Wisconsin?
On $66,172 of straight-time pay plus $6,108 of overtime premium: $1,311 off your federal bill, less $464 that Wisconsin takes. Real net effect of the deduction: $847.
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

Minnesota 9.8%Illinois 5.0%Michigan 4.3%Iowa 6.0%Indiana 3.0%All states →

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