⏱️ Overtime Deduction
Virginia conforms. Deduction applies at both federal and state (5.75%) levels.
💵 Tips Deduction
Virginia conforms. Tips deduction applies at both federal and state (5.75%) levels.
No Tax on Overtime in Virginia
Virginia uses rolling conformity to the federal tax code, meaning it automatically adopts IRS changes including the OBBBA overtime deduction. Virginia workers who qualify for the federal No Tax on Overtime deduction can also deduct their overtime premium from their Virginia state taxable income. With a state income tax rate of 5.75%, this means additional state-level savings on top of your federal deduction.
The overtime premium deduction is worth up to $12,500 (single) or $25,000 (married filing jointly) at the federal level, plus an additional deduction against your Virginia state taxable income at the 5.75% rate. A Virginia worker in the 22% federal bracket who deducts $10,000 in overtime premiums saves approximately $2,200 federally plus $575 in Virginia state taxes.
No Tax on Tips in Virginia
Tipped workers in Virginia receive the full benefit of the No Tax on Tips deduction at both the federal and state level. If your occupation appears on the IRS TTOC list and you received qualifying tips in 2025, your deduction reduces both your federal and Virginia state taxable income.
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 →Virginia OBBBA — Frequently Asked Questions
Does Virginia conform to the OBBBA No Tax on Overtime deduction?
Yes. Virginia uses rolling conformity to the federal tax code and automatically adopts OBBBA changes. You receive the deduction at both the federal and Virginia state level.
How do I calculate my No Tax on Overtime savings as a Virginia resident?
Use the OBBACalc overtime calculator. Enter your income, filing status, select Virginia, 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 Virginia-specific savings.
Can I claim both the overtime and tips deduction as a Virginia 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 Virginia?
The federal filing deadline is April 15, 2026 for tax year 2025. Virginia 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.