Minnesota Overtime Tax Deduction Calculator
Hourly workers in Minnesota.
The short answer: Run the pre-loaded scenario below: deduction $2,760, roughly $331 back in federal income tax at a 12% rate — $13 per biweekly paycheck. The math updates as you edit.
Regular rate (not OT rate)
Hours worked beyond 40/week
Modified Adjusted Gross Income
Overtime Premium Deduction
$2,760
✅ 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.
Minnesota Schedules and the 40-Hour Line
Minnesota's quirky 48-hour large-employer rule is broader than the FLSA — but the deduction still keys off 40.
- • MN large-employer state rule grants OT after 48 hours/week — broader than the FLSA in some seasonal industries
- • The OBBBA deduction base is premium for hours beyond 40/week (federal definition)
- • Mayo health system, food processing, and Twin Cities manufacturing drive OT
Worked Example
A single Minnesota hospital worker at $23/hour with 240 OT hours — the exact numbers are editable.
- • Premium portion: $23 ÷ 2 = $11.50/hour on OT hours
- • Deduction: $2,760 (watch the cap and MAGI phase-out as you raise the inputs)
- • Federal income tax savings: $331 at the 12% marginal rate
Keep Reading
Frequently Asked Questions
Minnesota's 48-hour rule — does that premium qualify?
The qualified OBBBA premium is defined on hours beyond 40/week; the 40-48 gap is state-law premium and the safe answer is it doesn't count.
Healthcare scheduling in Rochester — standard?
Yes — W-2 OT premium past 40/week qualifies.
Is the deduction on top of the standard deduction?
Yes. The overtime premium deduction is an above-the-line style deduction under the OBBBA rules for 2025-2028; it is not an either/or choice against your standard deduction.