Some truck drivers can claim the federal overtime deduction, but many long-haul and interstate truck drivers may not qualify. Eligibility depends mainly on whether the driver’s overtime pay was legally required under the federal Fair Labor Standards Act, or FLSA.
The deduction does not cover every payment that an employer describes as overtime. A truck driver who is exempt from the FLSA overtime rules generally cannot claim the deduction, even when the employer voluntarily pays extra for long hours.
What Is the Overtime Deduction?
A temporary federal deduction for qualified overtime compensation is available for tax years 2025 through 2028. It is commonly called the “no tax on overtime” provision.
The deduction applies only to the part of overtime compensation that exceeds the worker’s regular pay rate. When an eligible employee receives time-and-a-half pay, only the additional half-rate portion normally qualifies. The employee’s regular wages for the overtime hours are still taxable.
For example, suppose a truck driver normally earns $20 per hour and receives $30 per hour for ten overtime hours. The driver receives $300 for those hours. However, only $100—the additional $10 per hour—would normally count as qualified overtime compensation.
Why Many Truck Drivers May Not Qualify
The FLSA usually requires eligible employees to receive overtime pay after working more than 40 hours in a workweek. However, the Motor Carrier Act exemption removes certain transportation employees from the federal overtime requirement.
The exemption commonly applies to drivers who work for motor carriers or private motor carriers, perform duties affecting vehicle safety and operate in interstate or foreign commerce. Drivers, driver’s helpers, certain loaders and mechanics may fall within the exemption.
Many drivers operating large commercial trucks in interstate transportation are therefore not legally entitled to FLSA overtime. Because the tax deduction covers only overtime required under the FLSA, extra pay received by an exempt driver generally does not qualify. A union agreement, employment contract, company policy or state law requiring overtime does not by itself turn the payment into qualified federal overtime.
Which Truck Drivers May Qualify?
Truck drivers who are covered by the FLSA and are not subject to the Motor Carrier Act exemption may qualify.
One important exception can apply to employees who perform safety-related work on vehicles weighing 10,000 pounds or less. During a workweek in which an employee performs covered duties involving qualifying smaller vehicles, the employee may be protected by the FLSA overtime rules.
However, the small-vehicle exception generally does not cover vehicles designed or used to transport certain numbers of passengers or vehicles transporting hazardous materials that require placarding.
Some drivers performing only intrastate work may also be eligible, but simply staying within one state does not automatically settle the question. A driver may still be considered involved in interstate commerce when transporting goods that are moving through a broader interstate journey.
Local delivery drivers, van drivers and drivers of smaller commercial vehicles may have a stronger possibility of qualifying, depending on the vehicle, employer, routes and actual job duties.
Do Owner-Operators Qualify?
A genuine self-employed owner-operator normally does not receive overtime required by the FLSA. Business profits earned from working additional hours are not qualified overtime compensation merely because the driver worked more than 40 hours.
Receiving Form 1099-NEC also does not automatically make overtime deductible. A worker must still have received compensation that legally qualifies as FLSA overtime. Worker classification can be complicated when a company labels a driver an independent contractor even though the working relationship resembles employment.
A driver who is uncertain about classification should not assume that either a W-2 or 1099 alone determines eligibility.
How Much Can a Driver Deduct?
The maximum annual deduction is $12,500 for most qualifying taxpayers and $25,000 for married couples filing a joint return.
The deduction begins to phase out when modified adjusted gross income exceeds $150,000 for an individual or $300,000 for a married couple filing jointly. Married taxpayers must file jointly to receive the deduction, and the taxpayer claiming it must have a valid Social Security number. The deduction is available whether the taxpayer itemizes deductions or takes the standard deduction.
The deduction reduces federal taxable income. It does not mean that the overtime payment is completely free from all taxes. Social Security and Medicare taxes generally continue to apply, and state income-tax treatment may be different.
What Records Should Drivers Keep?
Drivers should keep year-end wage statements, pay stubs, employment agreements, vehicle records and information showing how overtime was calculated. Records of vehicle weight, routes and the type of cargo transported may also help determine whether the Motor Carrier Act exemption applies.
For tax year 2025, employers were not required to report qualified overtime separately on every Form W-2 or Form 1099. Eligible workers may need to calculate the amount using their payroll records and the Schedule 1-A instructions.
For tax years beginning with 2026, employers and other payers are required to separately report qualified overtime compensation. The deduction is claimed through Schedule 1-A with the taxpayer’s federal income-tax return.
The Bottom Line
Truck drivers can claim the overtime deduction only when their overtime compensation was required under the FLSA and all other tax requirements are satisfied. Many interstate drivers operating large commercial trucks are covered by the Motor Carrier Act exemption and therefore may not qualify, even if their employer pays an overtime premium.
Drivers of smaller vehicles, certain local or intrastate drivers and other nonexempt transportation employees may qualify. Each driver should examine the employer, vehicle weight, routes, duties and reason the overtime was paid before claiming the deduction.
