Overtime deduction
If your W-2 doesn’t have the TT code in box 12, but another code in box 14 OTC, can you claim it as deduction?
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Hello JAJE,
The new overtime tax deduction is calculated as the "half" in "time-and-a-half" multiplied by the number of overtime hours worked during the year.
For example, if your base pay is $20/hr, and your overtime pay is $30/hr, then the $10/hr above your base pay is eligible for the overtime pay deduction. You would take the $10/hr and multiply it by the number of overtime hours worked to get the eligible overtime pay deduction.
Each company reports overtime pay differently. Some will report on box 12, others will report on box 14, and some won't report anything on the Form W-2 and leave it to the employee to do their own calculation.
In your situation, whether the Form W-2 Box 14, Code OTC, represents your overtime pay during the year that is eligible for the overtime pay deduction depends on how your company's payroll department reports it. Many employers are handling the overtime reporting differently this year. I would suggest you follow up with the payroll department to see what that code is and what the amount represents. If they confirm that it is your total overtime compensation for the year, then you can use that number to calculate your deduction.
We have a great article on our Community website that may help you do the calculations needed. It provides screenshots and examples , including how to determine your deduction if you had any double overtime during the year.
Here is the link:
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That was so helpful. Thanks !
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