No Tax on Overtime and Tips: What Actually Qualifies in 2026
As of August 2026, the "no tax on tips" and "no tax on overtime" deductions have been on the books for a full filing season — and the most common question is still the simplest one: how much of my pay actually qualifies? The headline numbers get repeated everywhere. The eligibility rules underneath them do not. This guide walks through what the IRS actually says: the dollar caps, the income limits, the one rule that disqualifies most of an overtime paycheck, and the schedule you file it on. Every figure below comes from IRS guidance, linked at the bottom. Contents What these deductions actually are The numbers: caps and income limits Overtime: only the "half" counts Tips: the occupation and SSN rules The $150,000 income phase-out How you claim it: Schedule 1-A Two more deductions from the same law FAQ What these deductions actually are Start with the name, because the name is doing a lot of dama...