Does Utah tax overtime pay?
Yes. Utah taxes overtime pay as ordinary wage income. The federal OBBBA overtime deduction lowers your federal taxable income, but Utah does not conform, so the state still taxes the overtime premium. Utah taxes overtime as ordinary wage income at its flat rate (4.45% for 2026, lowered from 4.55% by S.B. 60 retroactive to January 1, 2026). Utah starts from federal AGI with its own taxpayer credit structure and has not adopted the federal overtime deduction, so overtime remains fully taxable on the TC-40.
Federal rule vs Utah rule
| Layer | 2026 treatment of overtime premium |
|---|---|
| Federal | Up to $12,500 single / $25,000 MFJ of FLSA half-time premium deducted from taxable income, phasing out at $150k/$300k MAGI. 2025–2028. |
| Utah | Flat 4.45% for all taxable income (lowered from 4.55% retroactive to January 1, 2026) |
| Result for you | Utah taxes overtime as ordinary wage income at its flat rate (4.45% for 2026, lowered from 4.55% by S.B. 60 retroactive to January 1, 2026). Utah starts from federal AGI with its own taxpayer credit structure and has not adopted the federal overtime deduction, so overtime remains fully taxable on the TC-40. |
How state overtime taxation works
Most states start from federal AGI and add back or subtract state-specific adjustments. The federal OBBBA overtime deduction lives in federal taxable income only, so a state that starts from federal AGI still taxes the overtime unless it conforms to the deduction or passes its own exemption. Three groups result: the nine no-income-tax states never taxed overtime at all; a set of states that auto-coupled or legislated conformity exclude it for 2026; the rest, including large non-conforming states like California and New York, tax overtime as ordinary wages.
Every state, one table
All 50 states and DC. Tap any state.
| State | Taxes overtime? | Top 2026 rate |
|---|---|---|
| Alabama | Yes | 5.00% |
| Alaska | No (no income tax) | n/a |
| Arizona | Yes | 2.5% |
| Arkansas | Yes | 3.9% |
| California | Yes | 13.3% |
| Colorado | Yes | 4.40% |
| Connecticut | Yes | 6.99% |
| Delaware | Yes | 6.60% |
| District of Columbia | Yes | 10.75% |
| Florida | No (no income tax) | n/a |
| Georgia | Yes | 5.19% |
| Hawaii | Yes | 11% |
| Idaho | No (conforms) | 5.3% |
| Illinois | Yes | 4.95% |
| Indiana | Yes | 2.95% |
| Iowa | No (conforms) | 3.8% |
| Kansas | Yes | 5.58% |
| Kentucky | Yes | 3.50% |
| Louisiana | Yes | 3.00% |
| Maine | Yes | 7.15% |
| Maryland | Yes | 6.25% |
| Massachusetts | Yes | 9.0% |
| Michigan | No (conforms) | 4.25% |
| Minnesota | Yes | 9.85% |
| Mississippi | Yes | 4.00% |
| Missouri | Yes | 4.7% |
| Montana | No (conforms) | 5.65% |
| Nebraska | Yes | 4.55% |
| Nevada | No (no income tax) | n/a |
| New Hampshire | No (no income tax) | n/a |
| New Jersey | Yes | 10.75% |
| New Mexico | Yes | 5.9% |
| New York | Yes | 10.9% |
| North Carolina | Yes | 3.99% |
| North Dakota | No (conforms) | 2.5% |
| Ohio | Yes | 2.75% |
| Oklahoma | Yes | 4.50% |
| Oregon | No (conforms) | 9.9% |
| Pennsylvania | Yes | 3.07% |
| Rhode Island | Yes | 5.99% |
| South Carolina | No (conforms) | 6.00% |
| South Dakota | No (no income tax) | n/a |
| Tennessee | No (no income tax) | n/a |
| Texas | No (no income tax) | n/a |
| Vermont | Yes | 8.75% |
| Virginia | Yes | 5.75% |
| Washington | No (no income tax) | n/a |
| West Virginia | Yes | 4.82% |
| Wisconsin | Yes | 7.65% |
| Wyoming | No (no income tax) | n/a |
Common questions
Does Utah tax overtime pay in 2026?
Yes. Utah taxes overtime pay as ordinary wage income. The federal OBBBA overtime deduction lowers your federal taxable income, but Utah does not conform, so the state still taxes the overtime premium. Utah taxes overtime as ordinary wage income at its flat rate (4.45% for 2026, lowered from 4.55% by S.B. 60 retroactive to January 1, 2026). Utah starts from federal AGI with its own taxpayer credit structure and has not adopted the federal overtime deduction, so overtime remains fully taxable on the TC-40.
Why doesn't the federal overtime deduction always help on my Utah return?
The federal deduction applies to federal taxable income only. States that start from federal AGI and do not conform still tax the overtime premium. Utah taxes overtime as ordinary wage income at its flat rate (4.45% for 2026, lowered from 4.55% by S.B. 60 retroactive to January 1, 2026). Utah starts from federal AGI with its own taxpayer credit structure and has not adopted the federal overtime deduction, so overtime remains fully taxable on the TC-40.
What federal overtime deduction applies in Utah?
Up to $12,500 single / $25,000 MFJ of the FLSA half-time premium, 2025–2028, phasing out at $150k/$300k MAGI. See the overtime calculator.
Is the state rate the only thing that matters?
No. State tax is computed on wages after federal AGI, so the state layer sits on top of your federal return. Local income taxes (New York City, Yonkers, Maryland counties) and state-specific addbacks can change the effective state tax on your overtime.
Related calculators
Comparing states? See which states tax overtime pay across all 50 states and DC.
Sourced to Utah State Tax Commission - Individual Income Tax, Tax Foundation: Utah income tax rate. Verified October 1, 2026, pending CPA sign-off.