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Deduction for Seniors

New deduction: Effective for 2025 through 2028, individuals who are age 65 and older may claim an additional deduction of $6,000.

This new deduction is in addition to the current additional standard deduction for seniors under existing law.

The $6,000 senior deduction is per eligible individual (i.e., $12,000 total for a married couple where both spouses qualify).

Deduction phases out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers).

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"No Tax on Overtime” allows workers to deduct up to $12,500 (or $25,000 for joint filers) of qualified overtime pay on their federal income tax return.
The law is currently in effect for tax years 2025 through 2028

The No Tax on Overtime deduction starts to phase out for single filers with a MAGI of $150,000 or higher ($300,000 for joint filers). The deduction is reduced by $100 for every $1,000 above those thresholds. Single filers whose MAGI is $275,000 or above—or $550,000 or higher for married couples filing jointly—are not eligible for any part of the No Tax on Overtime deduction.

Many workers who log overtime hours qualify for No Tax on Overtime. Here are the types of workers who qualify for this new tax deduction:

Non-exempt employees

Workers must be non-exempt, meaning they’re eligible for overtime pay, and receive a W-2 or 1099. Non-exempt employees are often hourly workers, but the Department of Labor considers some salaried employees earning under $684 per week to be non-exempt as well.

The deduction is not available to married couples who file separate tax returns. Married couples must file jointly to claim the No Tax on Overtime deduction.

Your W2 should show the overtime pay that is included in your wages or obtained a report from your employer.

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