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Introduction: Why This Matters in Jackson
In Jackson Hole, long hours aren’t the exception — they’re the rule. Ski season brings packed hotels and busy restaurants. Summer brings construction booms and tourism surges. That often means overtime pay for hospitality workers, healthcare staff, and contractors.
Thanks to the One Big Beautiful Bill Act (OBBB), starting in tax year 2025, eligible workers can deduct extra hourly pay earned by working overtime from federal taxable income. For many residents, the One Big Beautiful Bill Act is a chance to save significantly. Working with an experienced Jackson Hole tax accountant who understands the new rules can help you to take advantage of them.
How the Overtime Deduction Works
Effective years: 2025–2028
Deduction limit: Up to $12,500 for single filers and $25,000 for joint filers
Income phase-out: Deduction begins phasing out above $150,000 MAGI (single) or $300,000 (joint)
What qualifies: Only the overtime premium (the “half” in the “time and a half” pay required under the Fair Labor Standards Act for hours over 40 per week) qualifies. The base wage portion and voluntary/state law extras do not qualify.
Still taxed for FICA: Social Security and Medicare taxes still apply to overtime; this deduction only impacts federal income tax
Reporting requirement: Overtime must be properly documented on a W-2 or other information return
Who Benefits Most in Jackson
Hospitality & resort staff: Servers, bartenders, housekeepers, ski patrol, and lift ops often log heavy OT during peak months.
Healthcare professionals: Nurses, EMTs, and support staff at St. John’s often work extended shifts.
Construction & trades: Short build seasons in Teton County mean long weeks and compressed projects.
Tourism services: Guides, outfitters, and event crews face long hours during festivals and high season.
For small business owners in Jackson, this is also a critical payroll update. A trusted small business CPA in Jackson, WY can help employers ensure compliance and highlight these benefits to their staff.
Example: Jackson Ski Season Worker
A line cook at a Teton Village restaurant earns $20/hour. During ski season, they average 10 overtime hours per week at time-and-a-half.
Tourism services: Guides, outfitters, and event crews face long hours during festivals and high season.
Premium portion = $10/hour × 10 hours = $100/week
Over a 16-week ski season: $1,600 overtime premium
Under OBBB, that $1,600 can be deducted from taxable income (assuming under the $12,500/$25,000 cap).
This is where working with accountants in Jackson, WY can make the difference in filing correctly and maximizing deductions
What You Should Do Now
1. Track your overtime carefully:
Keep pay stubs and personal logs.
2. Confirm employer reporting:
Make sure overtime premiums are broken out properly on your W-2.
3. Stack with other deductions:
Service workers may also qualify for the new tips deduction (up to $25,000).
4. Plan ahead:
This deduction only runs 2025–2028.
Why This Matters for Employers
If you own or manage a restaurant, hotel, or construction business in Jackson:
Update payroll software to reflect overtime premiums clearly.
Educate employees about the new deduction.
Work with a CPA in Jackson, WY to prepare clean reporting and avoid compliance mistakes.
Want to see how much the OBBB overtime deduction could save you in 2025?
Our Jackson Hole tax accountants specialize in helping workers and businesses:
Estimate eligible overtime and tip deductions
Navigate SALT cap changes and small business strategies
Stay compliant while maximizing savings
Call us at 307-201-1474 or Submit Inquiry Here.
FAQ Section
Who qualifies for the OBBB overtime deduction?
Any worker earning overtime pay required by federal law (over 40 hours/week), including service, hospitality, healthcare, and construction workers.
How much can I deduct for overtime under OBBB?
Up to $12,500 for single filers or $25,000 for married filing jointly, subject to income limits ($150,000 MAGI for Single Taxpayers and $300,000 for joint filers).
How long does the overtime deduction last?
It applies for tax years 2025 through 2028.
Does this mean I don’t pay taxes on any overtime?
No. Only the overtime premium portion (the half-time above regular pay) qualifies, and it is still subject to Social Security and Medicare taxes.