Does Virginia tax overtime pay?
Yes. Virginia taxes overtime pay as ordinary wage income. The federal OBBBA overtime deduction lowers your federal taxable income, but Virginia does not conform, so the state still taxes the overtime premium. Virginia taxes overtime wages as ordinary income. Virginia starts from federal adjusted gross income and decouples from most post-2017 federal deduction changes, so the federal OBBBA overtime deduction does not apply on Virginia returns. Overtime remains fully state-taxable for 2026.
Federal rule vs Virginia 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. |
| Virginia | Graduated rates of 2%, 3%, 5%, and 5.75%; the top 5.75% rate applies to taxable income over $17,000 (single) |
| Result for you | Virginia taxes overtime wages as ordinary income. Virginia starts from federal adjusted gross income and decouples from most post-2017 federal deduction changes, so the federal OBBBA overtime deduction does not apply on Virginia returns. Overtime remains fully state-taxable for 2026. |
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 |
| Utah | Yes | 4.45% |
| Vermont | Yes | 8.75% |
| 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 Virginia tax overtime pay in 2026?
Yes. Virginia taxes overtime pay as ordinary wage income. The federal OBBBA overtime deduction lowers your federal taxable income, but Virginia does not conform, so the state still taxes the overtime premium. Virginia taxes overtime wages as ordinary income. Virginia starts from federal adjusted gross income and decouples from most post-2017 federal deduction changes, so the federal OBBBA overtime deduction does not apply on Virginia returns. Overtime remains fully state-taxable for 2026.
Why doesn't the federal overtime deduction always help on my Virginia 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. Virginia taxes overtime wages as ordinary income. Virginia starts from federal adjusted gross income and decouples from most post-2017 federal deduction changes, so the federal OBBBA overtime deduction does not apply on Virginia returns. Overtime remains fully state-taxable for 2026.
What federal overtime deduction applies in Virginia?
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 Tax Foundation, 2026 State Income Tax Rates and Brackets (Jan. 1, 2026), ITEP, Tips and Overtime Income Tax Deduction and State Budgets (Dec. 8, 2025). Verified October 1, 2026, pending CPA sign-off.