A $3,000.00 qualified premium, single, $80,000.00 of total income, is $3,000.00 on line 1b. Spread across 26 paychecks, the income-tax estimate is about $25.38 a paycheck. That paycheck figure is not a line on the form.
Worksheet line 1b
$3,000.00
Worksheet line 1b is $3,000.00. Step 4(b) adds other deductions.
Line 1b is blank once total income reaches the threshold. The return phases the deduction out instead. Step 4(b) is worksheet line 15, which adds deductions this page does not compute.
| Worksheet line 1b | $3,000.00 |
|---|---|
| Estimated federal income tax on that line | $660.00 |
| That tax, per paycheck | $25.38 |
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Line 1b = qualified overtime, capped, and only when total income is under $150,000 ($300,000 joint). Step 4(b) = worksheet line 15.
The 2026 Form W-4 says Step 4(b) is the amount from the Deductions Worksheet, line 15. Line 1b of that worksheet is qualified overtime compensation: the and-a-half portion of time-and-a-half, up to $12,500, or $25,000 if married filing jointly. You enter it only if total income is less than $150,000, or less than $300,000 if married filing jointly. At the threshold the worksheet leaves the line blank. The tax return does not use that cliff. It reduces the deduction by $100 for each full $1,000 over the same threshold.
Line 15 adds line 1b to qualified tips, car-loan interest, the senior amount, other adjustments, and any itemized deductions above the standard deduction. This page computes line 1b only. If those other lines are zero, line 15 equals line 1b and that is the Step 4(b) amount. If they are not zero, add them yourself. Complete Steps 3 through 4(b) on only one Form W-4, the highest-paying job, when you have more than one job.
FS-2026-13 says an employer may not reduce withholding for this deduction unless you furnish an updated Form W-4. The per-paycheck amount here is the estimated federal income tax on line 1b, divided by the number of paychecks. It is not Step 4(c). Married filing separately cannot claim the deduction, so line 1b is zero.
| Line 1b | $3,000.00 |
|---|---|
| Estimated tax | $660.00 |
| Per paycheck | $25.38 |
| Line 1b | $12,500.00 |
|---|
Only when the rest of the Deductions Worksheet is zero. Step 4(b) is line 15. Line 1b is the overtime piece of that total. Tips, car-loan interest, the senior deduction, adjustments, and itemized deductions above the standard deduction are added before the number goes on Step 4(b).
The worksheet tells you to enter the overtime estimate only if total income is under $150,000, or under $300,000 if you file jointly. At or above that line, line 1b stays blank on the form. The return can still allow a reduced deduction until the phase-out uses it up. Use the estimator at irs.gov/W4App if the worksheet's cliff does not fit the year.
No. Overtime stays subject to income-tax withholding. The employer reduces withholding for this deduction only after an updated Form W-4. Social Security and Medicare are not reduced by the deduction.