If you worked overtime in tax year 2025, you may be eligible for a temporary income tax deduction under Public Law 119-21. This change, which applies to tax years 2025 - 2028, only applies if you have “qualified overtime compensation” and your position is designated as Non-Exempt from the Fair Labor Standards Act.
How do I know if I’m eligible for this tax deduction in 2025?
- You worked overtime from 12/15/2024 to 12/13/2025.
- Your SF-50 shows N (Non-Exempt) in Block #35.
- You receive an email from the National Payroll Division that contains your “qualified overtime compensation” amount from 2025.
How is my ‘qualified overtime compensation’ determined?
- Your “qualified overtime compensation” (your deduction amount) is the part of your overtime pay that is in excess of your regular rate of pay and required by FLSA law (generally, the “half” portion of “time-and-a-half” pay).
- Note that your total overtime earnings can be found on your leave and earnings statement, and qualified overtime is not reported separately on the 2025 W-2.
Where can I read more about the tax rules for this deduction?
Who can I contact if I have questions?
- Questions about your FLSA status can be directed to your HR specialist.
- For payroll questions, please email customer service at KC-Payroll.Finance@gsa.gov.