⏱️ Overtime Deduction
Decision pending. Federal deduction guaranteed. State benefit (3.07%) TBD.
💵 Tips Deduction
Decision pending. Federal tips deduction guaranteed. State benefit (3.07%) TBD.
No Tax on Overtime in Pennsylvania
Pennsylvania is a static conformity state, meaning it does not automatically adopt federal tax changes. The Pennsylvania Department of Revenue is currently reviewing whether to conform to the OBBBA overtime and tips deductions. A decision is expected before the April 15, 2026 filing deadline. If Pennsylvania conforms, workers will receive an additional state-level deduction on top of their federal savings. If it does not conform, only the federal deduction applies.
No Tax on Tips in Pennsylvania
Tipped workers in Pennsylvania should monitor this page for updates. The federal No Tax on Tips deduction applies regardless of Pennsylvania's decision. The question is whether Pennsylvania will also allow the deduction against state taxable income, which could save an additional 3.07% on qualifying tips.
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 →Pennsylvania OBBBA — Frequently Asked Questions
Does Pennsylvania conform to the OBBBA No Tax on Overtime deduction?
Pennsylvania has not yet made a final decision. As a static conformity state, it must pass legislation to adopt OBBBA. A decision is expected before April 15, 2026.
How do I calculate my No Tax on Overtime savings as a Pennsylvania resident?
Use the OBBACalc overtime calculator. Enter your income, filing status, select Pennsylvania, 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 Pennsylvania-specific savings.
Can I claim both the overtime and tips deduction as a Pennsylvania 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 Pennsylvania?
The federal filing deadline is April 15, 2026 for tax year 2025. Pennsylvania 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.