Is overtime taxed in my state?

The federal deduction is taken after adjusted gross income, in the same place as the standard deduction. A state whose return starts from federal AGI — the large majority — never sees it, unless its legislature writes a separate subtraction. A state that starts from federal taxable income picks it up automatically when its conformity date covers the 2025 law, as Iowa, North Dakota, Montana, Idaho and Oregon did, unless it adds the amount back, as Colorado does from 2026.

A few legislatures acted on purpose: Arizona subtracted the federal amount from 2025, Michigan mirrors it for 2026–2028, Indiana allows it for 2026 only, and Alabama and Georgia created smaller deductions of their own ($1,000 and $1,750). Several more states debated bills in 2026 that did not pass — Wisconsin’s was vetoed — and Hawaii expressly switched the federal provision off.

Only the half-time premium the FLSA requires is ever in play. State-only overtime, such as California’s daily overtime, is fully taxed everywhere.

The federal deduction runs through 2028. Indiana’s state deduction lapses after 2026, while Michigan’s, Alabama’s and Georgia’s are written through 2028. States that follow the federal deduction through conformity can change course at any session, as Colorado did. The calculator applies each state’s 2026 rule to 2027 and 2028 unless the law already says otherwise, and every state page shows the date we last checked.

Each state’s entry, with the revenue-department document behind it, is on its state page; all documents are listed on Sources.