Updated October 28, 2026. Quick answer: If you or your spouse received qualified overtime from more than one payor on Form 1099-NEC or Form 1099-MISC in 2025, this worksheet in the Form 1040 instructions adds the qualified part from each form. The total goes on Schedule 1-A line 14b. The 1099 total is never entered whole: only the overtime premium inside it is.
More on the 2026 tax figures: the 2026 overtime deduction.
More on the 2027 tax figures: the 2027 overtime deduction.
When you use it
“If you and/or your spouse received qualified overtime compensation from more than one payor in 2025, complete the Qualified Overtime Compensation From More Than One Payor Worksheet.” The employee version, for Form W-2 wages, is the employer worksheet.
The worksheet
Line 1 has a row for each of up to five payors, A to E, and two columns.
| Column or line | What the worksheet says |
|---|---|
| (a) | “Payor’s name” |
| (b) | “Qualified overtime reported on Form 1099-NEC, box 1, or Form 1099-MISC, box 3” |
| Line 2 | “Add the amounts from lines 1A through 1E, column (b) and enter this amount on Schedule 1-A, line 14b” |
On the form, line 14b is captioned “Qualified overtime compensation included in Form 1099-NEC, box 1, or Form 1099-MISC, box 3 (see instructions)”.
Line 14b: only the overtime part of the 1099
“Enter on Line 14b only the qualified overtime compensation amount that is included in Form 1099-NEC, box 1, or Form 1099-MISC, box 3. Do not enter the total amount from Form 1099-NEC, box 1, or Form 1099-MISC, box 3.” For 2025 these forms did not separately report overtime, so you work out the amount yourself.
How to figure the amount when the form does not show it
“Qualified overtime compensation means overtime compensation that is paid to you as required under section 7 of the Fair Labor Standards Act of 1938 (FLSA) that is more than the amount of your regular rate of pay.” “This generally means the “half” portion of “time-and-a-half” compensation that is required by the FLSA.”
The instructions list methods for when the amount is not separately identified, such as dividing a total for the overtime hours by three, or using a pay stub that shows the premium. Two of the instructions’ examples cover an employer that pays double time:Example 2 is an FLSA-eligible employee whose employer “pays overtime equal to twice the regular pay”. With $10,000 at the normal rate and $10,000 as premium, ““Time-and-a-half” would be equal to $15,000 (the $10,000 for your regular wage for the overtime hours multiplied by 1.5).” The half portion is $15,000 divided by 3, or $5,000. Example 3 reaches the same $5,000 from a pay stub that shows only a $20,000 total for the overtime hours, by first dividing $20,000 by 2 to get $10,000 of regular wages.
An example with invented numbers
Illustration, not an IRS example. A contract worker has qualified overtime of $1,400 inside one Form 1099-NEC and $2,600 inside a Form 1099-MISC.
| Payor | Column (b) |
|---|---|
| A: Payor A (invented) | $1,400 |
| B: Payor B (invented) | $2,600 |
| Line 2, computed: 1,400 + 2,600, to Schedule 1-A line 14b | $4,000 (computed) |
The $4,000 total is the amount for line 14b. Neither form’s box total is used.
The limits that still apply
The instructions cap the deduction and reduce it at higher incomes. “You can’t deduct more than $12,500 ($25,000 if married filing jointly) of qualified overtime compensation.” The capped amount is reduced when modified adjusted gross income, the Schedule 1-A line 3 amount, is above $150,000 for single, head of household or qualifying surviving spouse filers, or above $300,000 for married filing jointly. “If you are married, you must file a joint return with your spouse to claim this deduction.”
Edition
This page reads the Instructions for Form 1040 and 1040-SR (2025), the file irs.gov served on 2026-10-28 (sha256 in the kit data). It covers the 2025 return, filed in 2026. Check the tax year printed on the worksheet in your own copy and use that year’s line numbers and dollar amounts, because a different year’s worksheet can word its lines differently.
Common mistakes
- Entering the box 1 total of a Form 1099-NEC. The instruction says not to.
- Treating double-time pay as all qualified. Only the half portion of time-and-a-half that the FLSA requires counts.
- Using this worksheet for W-2 overtime. Wage overtime goes on the employer worksheet and line 14a.
- Skipping the documents. The instructions say to keep a copy of any document you relied on.
Related: Form 1099-NEC boxes 1b to 1d, Form 1099-MISC boxes 13a, 13b and 14, Form 1040-X lines 4a to 5, and employer worksheet.
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Answer againSources
- Instructions for Form 1040 and 1040-SR (2025): https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
- Schedule 1-A (Form 1040) (2025), Additional Deductions: https://www.irs.gov/pub/irs-pdf/f1040s1a.pdf
Read from the IRS documents linked above on October 28, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.