In your email you wrote: 'There is no limit on the amount one spouse can contribute to the deduction.'
This means that a MFJ couple who are under the MAGI phase out of $300k can take a full $25k deduction when one spouse has $25k qualified OT and the other spouse has -0-, correct?
Hi Tom. I need clarification on "No Tax on Overtime" regarding firefighters. In regards to firefighters, my client is paid on a 56 hour pay period (bi-weekly) at 112 hours "regular pay." With his W2 the city included a supplemental statement calculating his deductible overtime as 12 hours total for the year.
I'm questioning this amount, while reviewing the Fact Sheet #8 on FSLA it indicates that Fire Protection and Law Enforcement employees have different overtime requirements, and employers may use a 28 day period to calculate overtime. It goes on to say that if their hours exceed 106 hours for a 14 day period they are entitled to overtime. If this is the case, my client who has a standard 112 regular hours per pay period, his overtime on his regular time alone would be 156 hours (6x26). He also had 269 hours of overtime (at double-pay) for the year. Could you help me clarify the appropriate deduction in this situation?
I can't really do this calculation because I don't know the specific firefighter rules. If the double time is qualifying overtime, you multiply the total by 25% to arrive at the deductible amount.
Hi Tom.
In your email you wrote: 'There is no limit on the amount one spouse can contribute to the deduction.'
This means that a MFJ couple who are under the MAGI phase out of $300k can take a full $25k deduction when one spouse has $25k qualified OT and the other spouse has -0-, correct?
TIA.
Yes.
Hi Tom. I need clarification on "No Tax on Overtime" regarding firefighters. In regards to firefighters, my client is paid on a 56 hour pay period (bi-weekly) at 112 hours "regular pay." With his W2 the city included a supplemental statement calculating his deductible overtime as 12 hours total for the year.
I'm questioning this amount, while reviewing the Fact Sheet #8 on FSLA it indicates that Fire Protection and Law Enforcement employees have different overtime requirements, and employers may use a 28 day period to calculate overtime. It goes on to say that if their hours exceed 106 hours for a 14 day period they are entitled to overtime. If this is the case, my client who has a standard 112 regular hours per pay period, his overtime on his regular time alone would be 156 hours (6x26). He also had 269 hours of overtime (at double-pay) for the year. Could you help me clarify the appropriate deduction in this situation?
I can't really do this calculation because I don't know the specific firefighter rules. If the double time is qualifying overtime, you multiply the total by 25% to arrive at the deductible amount.