Overtime Deduction for Police Officers and Firefighters in 2026

Police officers and firefighters work some of the most overtime-intensive schedules in the American workforce. Their shifts often run 10 to 24 hours, and their overtime is calculated differently from standard workers because of the FLSA Section 7(k) exemption. This creates a unique situation for the IRC Section 225 overtime deduction: the hours that count as overtime depend on the work period length and the applicable FLSA threshold, not simply on whether you worked more than 40 hours in a week. This post walks through a police officer's typical 28-day work period to show how the deduction applies to public safety pay structures.

The FLSA 7(k) work period for public safety

Under FLSA Section 7(k) (29 USC Section 207(k)), employers of police officers and firefighters can designate a "work period" of between 7 and 28 days instead of using the standard 7-day workweek. Overtime is then calculated based on the total hours in that work period, not on a week-by-week basis.

For a 28-day work period, the FLSA thresholds are:

• Law enforcement: 171 hours in 28 days
• Fire protection: 212 hours in 28 days

Hours worked up to the threshold are straight time. Hours above the threshold must be paid at time-and-a-half (or the applicable overtime rate). Only the premium portion of those overtime hours qualifies for the IRC Section 225 deduction.

Scenario: Police officer on a 28-day work period

Sergeant Williams works for a city police department that uses a 28-day work period. He earns $32.00 per hour and works a schedule of four 12-hour shifts per week (averaging 48 hours per week). Over a 28-day cycle, he works approximately 192 hours.

Under the 7(k) exemption, overtime begins after 171 hours. Williams works 21 overtime hours per 28-day cycle (192 minus 171). Over 13 cycles per year, he accumulates approximately 273 overtime hours.

Williams's $4,368 in overtime premium is below the $12,500cap, so he deducts the full amount. At the 22% marginal rate, he saves $961 in federal income tax. An officer who picks up additional shifts, works special details, or earns a higher hourly rate could accumulate a larger premium.

How the firefighter threshold differs

Firefighters on a 28-day work period have a higher overtime threshold: 212 hours instead of 171 for police. This reflects the scheduling reality of fire service, where 24-hour shifts are common. A firefighter working 56 hours per week (a common fire schedule with 24-on/48-off rotations) logs approximately 224 hours in a 28-day period, resulting in only 12 overtime hours per cycle.

The higher threshold means firefighters generally accumulate fewer overtime hours per cycle than police officers on similar schedules. However, firefighters who pick up extra shifts, work at busy urban departments, or cover staffing shortages can still build significant overtime premium totals over the course of a year.

Calculating the deductible premium

The deductible amount is only the premium on overtime hours, not the total pay for those hours. For time-and-a-half, the premium is 0.5x the regular rate. The base-rate portion of overtime hours is treated as regular wages.

Starting in TY 2026, your department's payroll system should report the overtime premium using W-2 Box 12 Code TT. This amount is what you enter on Schedule 1-A when claiming the deduction. If your department also pays special detail or off-duty overtime at different rates, the premium calculation applies separately to each rate tier.

FICA, pension, and the deduction

The IRC Section 225 deduction reduces federal income tax only. It does not affect:

• FICA taxes: Social Security (6.2%) and Medicare (1.5%) still apply to all overtime wages, including the premium
• Pension contributions: If your department calculates pension contributions based on total compensation (including overtime), the deduction does not change that calculation
• State income tax: Unless your state explicitly conforms to IRC Section 225, the deduction applies at the federal level only

Many police officers and firefighters participate in state or municipal pension systems rather than Social Security. In those cases, FICA may not apply, but the pension contribution structure is unaffected by this federal income tax deduction.

For officers with MAGI approaching $150,000 (single) or $300,000 (MFJ), the deduction begins to phase out at10% of the excess. High-ranking officers or those in high-cost-of-living areas may need to account for this.

To estimate your overtime deduction savings, use the no tax on overtime calculator. For the full eligibility rules, see Who Qualifies for No Tax on Overtime? For a detailed explanation of the premium-only rule, see the qualified overtime compensation glossary entry.