01/29/2026
IAFF Tax Guidance.
January 28th, 2026
Dear Brothers and Sisters,
As we prepare to file our IRS tax returns for 2025, I wanted to share this import information on No Tax on Overtime and how it impacts our members. If you have questions, it is always important to consult with a tax professional before filing.
IAFF Guidance
H.R. 1 FAQ: OVERTIME TAX WAIVER
FACTS FOR FIRE FIGHTERS
At the IAFF’s 56th Convention, delegates adopted Resolution 25, which called on our union to address the oppressive 53-hour workweek established by the Fair Labor Standards Act. Nearly 130,000 IAFF members, across all 13 US Districts, work schedules of 53 or more hours per week. Tens of thousands of more IAFF members work 42 to 48-hour weeks, just below the FLSA limit. Staffing shortages at fire departments nationwide make this problem worse by forcing fire fighters to work grueling amounts of overtime.
As Congress developed the One Big Beautiful Bill Act (H.R. 1), the IAFF worked closely with our allies on both sides of the aisle to help fire fighters keep their hard-earned money. Cutting the tax on overtime was an important step in defending fire fighters’ wages.
How Much Money Can I Save? Fire fighters and other hard-working Americans can deduct from their federal taxes up to $12,500 (or $25,000 for joint filers) for taxes they paid overtime earnings.
What Overtime Hours are Eligible? Any hours in excess of the FLSA limit (53 hours per week) can be counted towards the tax deduction. Fact Sheet #8: Law Enforcement and Fire Protection Employees Under the Fair Labor Standards Act (FLSA) | U.S. Department of Labor
Who Is Eligible? Anyone can take this deduction, even if you do not itemize your taxes. The deduction slowly decreases for individuals earning more than $150,000 or couples earning more than $300,000. In those cases, the deduction is reduced by $100 for every $1,000 someone is above the income threshold. The tax deduction does not fully disappear until individuals earn $275,000 or a couple filing jointly earns more than $550,000.
When Does This Tax Cut Take Effect? This tax cut will take effect this year and remain in effect until 2029. Congress is expected to reexamine the tax cut at that time. The IAFF will remain engaged in efforts to grow this tax cut to apply to as many fire fighters as possible, including those who have a lower threshold for earning overtime pursuant to collective bargaining agreement.
How Will I Know How Much to Deduct? H.R. 1 directs the Internal Revenue Service to identify eligible overtime on your W-2. Make sure to look for this number of eligible hours on your W-2 when completing federal tax return.
Overtime Example: The IRS is only allowing exemption on the half extra time of the overtime. IRS exemption rule: The IRS allows the exclusion only on the extra half-time portion, not the entire overtime amount.
So if the firefighter earned $15,000 in overtime pay, the calculation is:
Qualified overtime = $15,000 / 3 = $5,000.00
Why divide by 3? Because the overtime pay consists of:
2 parts regular pay (already taxed normally)
1 part extra half-time premium (eligible for exemption)
This means $5,000 is considered “qualified overtime compensation” for the tax year.
What Role Did the IAFF Have? The IAFF worked closely with Members of Congress to widen the eligibility rules and allow as many fire fighters as possible to receive these cuts. The IAFF will continue to work towards growing this tax cut on overtime income.
It is always important to consult with a tax professional before filing.
