# Can You Claim Both No Tax on Overtime and No Tax on Tips?

Yes — they're two separate deductions under different code sections, each with its own cap, phased out independently against the same income.

Yes, a worker with both qualifying overtime pay and qualifying tips can claim both deductions in the same year. They're separate provisions of the tax code (26 U.S.C. §224 for tips, §225 for overtime), each with its own cap and its own phase-out, both measured against the same modified adjusted gross income — neither deduction reduces the MAGI used to calculate the other.

Work out your own number with the free [No tax on overtime calculator](https://rulecost.com/paycheck/no-tax-on-overtime-calculator/).

A server who works a double shift into overtime, or a bartender on a scheduled overtime week, has
both kinds of qualifying income at once — and the two 2025 tax law deductions don't compete with each
other.

## Two separate code sections, two separate caps

The tips deduction lives at 26 U.S.C. §224; the overtime deduction is a different section, §225. They
were written together, phase out using an identical formula, and share the same $150,000/$300,000
MAGI threshold — but each has its own dollar cap, checked independently:

- Tips: up to $25,000, flat regardless of filing status.
- Overtime: up to $12,500 single, $25,000 joint.

A single filer with both could in principle deduct up to $37,500 combined ($25,000 tips + $12,500
overtime) before either phase-out reduces anything — see the
[overtime](/guides/no-tax-on-overtime-income-limits-explained/) and
[tips](/guides/no-tax-on-tips-income-limits-explained/) phase-out details for how each is reduced
above the threshold.

## Neither deduction shrinks the other's MAGI

The MAGI used to phase out each deduction is essentially adjusted gross income (with a couple of
foreign-income add-backs) — it isn't reduced by the tips or overtime deduction itself. That means
claiming the tips deduction doesn't lower the MAGI figure used to calculate the overtime phase-out, or
vice versa: both are measured against the same starting MAGI, independently.

## Filing status still has to match for both

Both deductions carry the identical rule that married filing separately can't claim them at all, at
any income. If you're filing separately, having qualifying income of both kinds doesn't change that —
neither deduction is available.

## The occupation and FLSA tests still apply separately

Qualifying for one doesn't automatically qualify you for the other — the tips deduction still requires
an occupation on Treasury's published list, and the overtime deduction still requires the pay to be
FLSA-mandated overtime, not a more generous contractual or state-law rate. A worker could have
qualifying tips but non-qualifying "overtime" (say, a union contract rate beyond FLSA's requirement),
and only claim the tips side.

To see both deductions together against your actual numbers, run your MAGI, tips and overtime premium
through the [no-tax-on-tips](/paycheck/no-tax-on-tips-calculator/) and
[no-tax-on-overtime](/paycheck/no-tax-on-overtime-calculator/) calculators — each shows its own
deduction and estimated tax savings independently.