Complete Story
01/28/2026
Separating Myth From Reality on New “No Tax on Overtime” Law
Source: Fisher Phillips, January 20, 2026
A new federal law enacted last year provides a tax benefit to employees who receive overtime pay – but calling it a “No Tax on Overtime” law is a bit of misnomer. For starters, OT pay remains taxable and subject to withholding rules. And while a new income tax deduction may be available to some employees who work overtime, only a limited portion of federally required overtime compensation is tax deductible. We’ll clear up some of the biggest misconceptions surrounding these new rules and provide some key employer takeaways – which will become especially important this tax season and beyond as more employees learn the realities of these rules and the IRS cracks down on employers’ new filing and information reporting obligations.
Overview of “No Tax on Overtime”
The One Big Beautiful Bill Act (OBBBA), which President Trump signed into law last year, includes a new federal income tax deduction related to overtime pay. This new deduction:
- applies for tax years 2025 through 2028;
- allows eligible workers to claim up to $12,500 (or $25,000 if married filing jointly) in “qualified overtime compensation” they received during the applicable tax year;
- phases out for individuals whose modified adjusted gross income (MAGI) for the year exceeds $150,000 ($300,000 if married filing jointly); and
- is not available if the individual’s MAGI is at or above $275,000 ($550,000 if married filing jointly).
The deduction is allowed for both itemizers and non-itemizers, so long as the individual includes their social security number on their tax return. If an individual is married, they must file a joint return in order to claim this deduction.
The Power of Print
Last Thursday marked the grand finale of our month-long Print Week celebrations. From packed rooms and award winners to the connections that brought our industry together, here are some of the highlights that made it so memorable.
Read More401(k) Refund Checks: Why They’re Not Always a Good Thing
Receiving money back from a 401(k) plan may seem like a win, but it often signals that the plan failed IRS nondiscrimination testing. When this happens, certain employees may be required to take corrective distributions, which can lead to unexpected tax consequences and reduced long-term retirement savings. The article also explains how better plan design can help prevent this issue.
Read MoreUSPS Announces Fuel Surcharge
The USPS filed notice with the PRC to impose an 8% fuel charge on competitive products, effective April 26, 2026 - January 17, 2027. Recent hikes in fuel prices - over a dollar in the last month alone - have had a significant impact. This is the first fuel surcharge the USPS has ever imposed.
Read MoreCan EPR & Single-Serve Beverage Packaging Coexist?
As extended producer responsibility (EPR) laws spread to more states, Packaging Digest asked beverage industry analysts what the ramifications could be for beverage manufacturers and their prevalent use of single-serve packaging.
Read MoreLocal Up Your Print Sales to Combat Rising Fuel Costs
Fuel prices are rapidly climbing right now, which sends a tsunami of rising costs through the economy. Businesses respond by tightening marketing budgets, which has a direct effect on the print industry. Fuel costs are outside a printer’s control. How you respond to them is not.
Read MoreSell Hard, Sell Nothing
You work hard but have no sales to show for it. Selling owners can relate to that. Being busy but not productive is often the rule, not the exception. This week's Short Attention Span Sales Tip changes that.
Read More