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Information Regarding the New Qualified Overtime Deduction and Reporting on Your 2025 W-2

Under HR1, commonly referred to as the “One Big Beautiful Bill Act,” employees may claim a deduction of up to $12,500 ($25,000 for joint filers) on their 2025 federal income tax return for qualified overtime compensation. Eligibility for the deduction depends on your Adjusted Gross Income (AGI) per your 2025 income tax return. The benefit is subject to income limits and phases out at higher income levels ($150,000 AGI for single filers and $300,000 AGI for joint filers). If your AGI is below these thresholds, you may be eligible to claim the full deduction.

The University of Rochester will report qualified overtime compensation paid to employees during the 2025 tax year in Box 14 of Form W-2. This amount will be labeled as “OTPremium.”

Please note the following:

  • The amount reported reflects only the premium portion of overtime compensation (generally the additional 0.5× rate paid above the employee’s regular hourly rate for eligible overtime hours).
  • The Box 14 entry is for informational purposes only and does not change the taxable wages reported in Boxes 1, 3, or 5.
  • The Box 14 information regarding qualified overtime compensation is being provided to assist you and your tax professional with the information needed to benefit from this deduction.

The University is not permitted to assist with any individual’s IRS tax form preparation or tax-related questions. Any specific tax questions or concerns about how this may affect your individual tax situation should be directed to your tax professional or a local IRS field office.