(NewsNation) — With tax season nearing for Americans, a new provision enacted under President Trump’s “big, beautiful bill” could provide some relief for the next few years.

The “No Tax on Overtime” is a tax deduction that allows certain workers to deduct up to $12,500 in qualified overtime compensation from their taxable income on their federal income tax return.

The temporary provision applies to tax years from 2025 through 2028. It went into effect immediately on Jan. 1, 2025, and ends Dec. 31, 2028.

“Some people will pay no federal income tax on their overtime pay, but higher-income people may still owe income taxes on at least a part of the overtime compensation they receive,” attorney Rocky Mengle said. “Plus, overtime pay is still subject to payroll taxes and, depending on where you live, maybe state or local income taxes, too.”

Who qualifies for the No Tax on Overtime?

To be eligible for the “No Tax on Overtime” deduction, workers must be covered by and not exempt from the Fair Labor Standards Act (FLSA).

People who can qualify must have a Social Security number that’s valid for employment and issued before the due date of your return, or don’t use the Married Filing Separately filing status.

The deduction can be obtained by both itemizing and non-itemizing taxpayers.

How can people claim No Tax on Overtime?

Claiming the No Tax on Overtime deduction can be done when people file their tax returns.

The IRS’s new form, the Schedule 1-A, can be used to calculate and claim the overtime deduction on a federal income tax return. Taxpayers are advised to send Schedule 1-A to the IRS with the rest of their return.

“When calculating the overtime deduction, MAGI is equal to the adjusted gross income reported on your Form 1040, plus any deduction or exemption claimed for,” added Mengle.