Shipyard Worker Overtime Tax Deduction Calculator
Run your real overtime numbers below. The estimate applies the same Schedule 1-A math as your federal return — no tax software, no signup.
The short answer: Cal — at the scenario numbers pre-loaded below, the OBBBA deduction is $7,750, worth about $1,705 in federal income tax at a 22% marginal rate ($66 per biweekly paycheck). Exact figures update live as you change the inputs.
Regular rate (not OT rate)
Hours worked beyond 40/week
Modified Adjusted Gross Income
Overtime Premium Deduction
$7,750
✅ You qualify for the full deduction
⚠️ This calculator provides estimates for informational and educational purposes only. It is not tax advice. Results are based on the One Big Beautiful Bill Act (OBBBA) and IRS Schedule 1-A. Consult a qualified tax professional for your specific situation.
What Counts (and What Doesn't)
Overhaul availabilities compress a year of OT into deployment-prep windows, and per-diem during away-from-home sea trials stays out of wages. Government-contract trades under the Service Contract Act still pay OT premium on top of required fringe — the fringe lands in benefits, the premium lands on your W-2, and only the latter is deductible here.
The full rules, caps and phase-outs for every deduction are in one table on the OBBBA rules page.
Worked Example
Cal fits hull at $31/hour, and overhaul availabilities plus sea trials pile up about 500 overtime hours a year.
- • Deductible amount: $7,750
- • Federal income tax savings: $1,705 (at the 22% marginal rate)
- • Per biweekly paycheck: $66
Every dollar of that comes off federal income tax while FICA still applies — the calculator above runs the same caps and phase-outs your return will.
Keep Reading
Frequently Asked Questions
Do Service Contract Act wages qualify for the OT deduction?
Yes. SCA-required health and welfare fringe goes to benefits, but the overtime premium on your hourly wages appears on your W-2 and is deductible like any other OT premium.
Do I need to itemize deductions to claim the overtime deduction?
No. The overtime premium deduction is an above-the-line adjustment on Schedule 1-A — you can take the standard deduction and still claim it in full.