⏱️ Overtime Deduction
Decoupled. Federal deduction applies. No Illinois state benefit at 4.95%.
💵 Tips Deduction
Decoupled. Federal tips deduction applies. No Illinois state benefit at 4.95%.
No Tax on Overtime in Illinois
Illinois has explicitly chosen not to conform to the OBBBA overtime deduction. This means your overtime pay remains fully taxable for Illinois state income tax purposes at the standard 4.95% rate. However, your federal deduction is completely unaffected — you still deduct your overtime premium from your federal taxable income and save based on your federal marginal rate.
No Tax on Tips in Illinois
Illinois does not conform to the No Tax on Tips deduction. Tips remain fully taxable at the Illinois state level. For federal purposes, tipped workers in qualifying occupations still receive the full $25,000 federal deduction. Only the state-level benefit is unavailable.
To qualify for the tips deduction, your occupation must appear on the IRS TTOC list of 68 approved tipped occupations. Common qualifying jobs include servers, bartenders, hair stylists, barbers, nail technicians, rideshare drivers, hotel staff, and casino dealers. Check your occupation →
TurboTax has updated their 2025 software to handle all OBBBA deductions — overtime, tips, and state-specific calculations.
File with TurboTax →Illinois OBBBA — Frequently Asked Questions
Does Illinois conform to the OBBBA No Tax on Overtime deduction?
No. Illinois has explicitly decoupled from the OBBBA deduction. Your federal deduction is unaffected, but Illinois state taxes apply to overtime as normal.
How do I calculate my No Tax on Overtime savings as a Illinois resident?
Use the OBBACalc overtime calculator. Enter your income, filing status, select Illinois, and enter your overtime wages. The calculator applies the correct IRS formula, the $12,500/$25,000 cap, the $150,000 phase-out, and shows your exact Illinois-specific savings.
Can I claim both the overtime and tips deduction as a Illinois worker?
Yes — if you qualify for both, you can stack them on the same return. The overtime deduction (max $12,500 single) and tips deduction (max $25,000) are calculated separately, each with their own phase-out at $150,000 MAGI. Both are claimed on Schedule 1-A of Form 1040.
When is the deadline to claim these deductions in Illinois?
The federal filing deadline is April 15, 2026 for tax year 2025. Illinois state returns are typically due the same date. File on time to claim your OBBBA deductions — extensions give more time to file but not more time to pay any taxes owed.