Overtime Pay NYS

Jenna690

Does FreeTaxUSA support the New York IT-225 add-back for the federal overtime deduction decoupling? This must be added back on IT-225

GeorgeM

Hello Jenna690:

Yes, our software will not include on your NY tax return the federal deduction for overtime compensation. You are correct in that NY does not align with the federal tax relief for overtime compensation.

While we do support NY IT 225, there is no need to prepare that form, or any other NY tax form, in order to add back your overtime compensation that was deducted on your federal tax return. In our software, none of the income items that a taxpayer can add back to their NY income relate to the federal deduction for overtime compensation.

For NY tax purposes, the relevant amount is the taxpayer’s federal adjusted gross income. Because, the federal adjusted gross income does not include the deduction for overtime compensation, that deduction does not thereafter become part of a taxpayer’s NY tax return.