The qualified overtime amount in Box 14 of your 2025 W-2 may be less than expected for the following reasons:
1. The straight time portion of overtime is not included in Box 14. Qualified overtime is the premium (half-time) pay above your regular rate for hours worked over 40 in a workweek, as required by the Fair Labor Standards Act (FLSA).
For example:
- Regular rate: $20 per hour
- Overtime rate (time-and-a-half): $30 per hour
- Qualified overtime amount: $10 per hour (the additional amount required by FLSA)
2. Non-worked hours contributed to overtime, such as holidays, vacation, or sick time are not included in Box 14. As required by the Fair Labor Standards Act (FLSA), qualified overtime hours only include hours worked. Overtime calculated using non-worked hours per university policy and bargaining agreement are not qualified.
3. Overtime earned or paid as FLSA compensatory time is not included in Box 14. If you received payment for compensatory time in 2025, a portion of that payment may still qualify as overtime for tax purposes. You should discuss your specific situation with your tax advisor.