IRS: Updated FAQs on Qualified Overtime Deduction

Article originally posted in This Week's News on 8/14/2026.

The IRS issued Fact Sheet FS-2026-13 which provides substantial updates including the following: 

• Removes 2025-only guidance.
• Clarifies deduction limits and timing.
• Adds FLSA coverage and exemption details.
• Details W-2, 1099-MISC, and 1099-NEC reporting rules.
• Adds withholding procedures for qualified overtime pay.
• Requires separate W-2 reporting to claim the deduction.
• Expands guidance for federal employees.