New Qualified Overtime Deduction Questions & Answers

The IRS added new FAQ on the overtime deduction.

As a reminder, employers are REQUIRED to report qualified overtime for the deduction based on the FLSA which differs from California overtime law. Only the 50% premium under the FLSA is a qualified deduction.

These new FAQs include

1. Only qualified OT amounts reported on W2 are allowed as a deduction.

2. If employee thinks qualified OT on W2 is overstated they can NOT use the overstated amount and must the correct amount.

3.  If employee thinks qualified OT on W2 is understated they are limited to this understated amount unless the W2 is corrected by their employer.

4. Substitute W2 (Form 4852) can NOT be used to support a qualified OT deduction as this is not reported by an employer.