2025 1095Cs and W2s are now available on ESS

Federal Tax Deduction for Qualified Overtime Pay

Under the federal One Big Beautiful Bill Act, individuals may be eligible to claim a federal income tax deduction for certain qualified overtime compensation for tax years 2025 through 2028. Qualified overtime generally refers to the premium portion of overtime pay required under the Fair Labor Standards Act (for example, the additional half-time portion of time-and-a-half pay).

Your total wages, including overtime, are reported in Box 1 of your Form W-2 and have been reported to the IRS in accordance with current requirements. The qualified overtime amount is separately listed in Box 14 (Code X) for informational purposes to assist you when preparing your personal tax return.

Because this deduction is claimed when preparing your federal income tax return and individual tax situations vary, the County cannot provide tax advice. Employees with questions about claiming this deduction or how it affects their taxes should consult a qualified tax professional.