Michigan Overtime Tax Deduction Calculator
Hourly workers in Michigan.
The short answer: At the scenario numbers pre-loaded below, the OBBBA deduction is $3,250, worth about $325 in federal income tax at a 10% marginal rate ($13 per biweekly paycheck). Change any input and every figure updates live.
Regular rate (not OT rate)
Hours worked beyond 40/week
Modified Adjusted Gross Income
Overtime Premium Deduction
$3,250
✅ 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.
When Michigan Hours Go Past 40
Michigan amended its OT rules upward — and auto schedules make OT a way of life.
- • Michigan OT: 1.5× after 40 hours/week; the state raised its overtime salary threshold (phased toward ~$55k+ over time; check the current year's figure)
- • Auto plants and suppliers run 50-hour weeks as baseline in strong years
- • UAW contracts add daily OT — the OBBBA safe base is premium beyond 40/week
Worked Example
A MFJ Michigan auto worker at $25/hour with 260 OT hours — the exact numbers are editable.
- • Premium portion: $25 ÷ 2 = $12.50/hour on OT hours
- • Deduction: $3,250 (watch the cap and MAGI phase-out as you raise the inputs)
- • Federal income tax savings: $325 at the 10% marginal rate
Keep Reading
Frequently Asked Questions
Do Michigan's higher OT rules change the OBBBA deduction?
No — more workers qualifying for OT means more people with premium dollars, but the deduction is still the beyond-40 premium half.
Auto-industry alternate work schedules (AWS) — how do they count?
AWS weeks still compute OT on hours beyond 40 in the workweek; run the actual premium lines.
Does the overtime deduction change my withholding during the year?
You can adjust your W-4 so the savings show up in each paycheck instead of waiting for a refund — the withholding adjuster on this site walks through it.