Nurses are among the biggest winners of the overtime deduction, because many work long, overtime-heavy schedules and are paid by the hour. The deduction covers the FLSA overtime premium (the half in time-and-a-half), up to $12,500 ($25,000 joint).
| Situation | Qualifies? |
|---|---|
| Hourly RN or LPN paid time-and-a-half over 40 hours a week | Yes, the premium part |
| Hospital using the FLSA 8/80 system (over 8 hours a day or 80 in 14 days) | Yes. 8/80 overtime is part of FLSA section 7 |
| Overtime required only by a union contract or state law | No, only the FLSA-required part |
| Salaried RN who meets the learned-professional exemption | Generally no |
| Per-diem or agency nurse paid hourly as an employee | Yes, for FLSA overtime |
| Travel nurse stipends | No; stipends aren't overtime |
Shift differentials raise your premium
Night, weekend and charge differentials are part of your “regular rate”. Under the FLSA, overtime is figured on the regular rate including those differentials, so your qualified premium may be higher than base rate × 0.5.
Example
An RN earning $40 an hour works about 210 overtime hours in 2026, so the FLSA premium is about $4,200. Single, with $98,000 of income, the deduction saves about $924 of federal income tax (22% bracket). The exact amount is the figure in box 12, code TT of the W-2.
Calculate yours in the overtime calculator.
Common questions
Do nurses get no tax on overtime?
Most hourly nurses do, for the FLSA overtime premium. Salaried nurses who are exempt professionals generally don't.
Does 8/80 overtime qualify?
Yes. The 8/80 system for hospitals is part of FLSA section 7, so the premium it requires qualifies.
Sources
- IRS FS-2025-03: Tax deductions for working Americans and seniors
- U.S. Department of Labor: Overtime pay under the FLSA
- U.S. Department of Labor: Fact Sheet #54, overtime in health care
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