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How to Claim No Tax on Tips and Overtime on Your Return (Schedule 1-A)

Last checked 2026-10-25 against IRS guidance

The IRS created Schedule 1-A (Form 1040), "Additional Deductions," for the new tips, overtime, car loan interest and senior deductions. Part III computes the overtime deduction; the tips deduction has its own part.

Steps

  1. Gather your W-2s, 1099s, and pay stubs showing tips and overtime.
  2. Confirm your occupation is on the IRS tipped-occupation list (tips) or that your overtime is FLSA-required (overtime).
  3. Enter qualified tips and qualified overtime on Schedule 1-A.
  4. Let the schedule apply the caps and the MAGI phase-out.
  5. Carry the total from Schedule 1-A to Form 1040. It reduces taxable income whether you take the standard deduction or itemize.
  6. Make sure your SSN is on the return and, if married, file jointly.

What about 2025 returns, when W-2s may not show these amounts?

For tax year 2025 the IRS granted transition relief (Notice 2025-69): employers were not required to separately report tips or qualified overtime, so you may use reasonable methods such as pay stubs or employer statements to figure the amounts. Keep those records.

Want it on one page? Tips & overtime filing checklist + worksheet ($7, optional). Everything in it is also free on this site.

Have a child born 2025-2028? Form 4547 can claim a $1,000 Trump Account deposit: see how to file Form 4547.

Sources

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