Your 2025 W-2 Is Out—And There's No Overtime Reported. Here's What to Do.

DFAS released W-2s today and if you looked for your qualified OT to match your December LES "Total Qualified Overtime Pay per PL119-21" amount but didn't see anything—you're not missing anything. Nothing was reported. While Box 12 exists on the 2025 W-2, there's no code TT (qualified overtime) assigned for 2025—that code doesn't go into effect until 2026. Since employers aren't required to report qualified overtime for 2025, DFAS didn't.

That means it's on you to calculate and claim your overtime deduction this year. Here's exactly what happened, why you should ignore your December LES, and how 2026 will look different.

Why Your 2025 W-2 Has No Overtime Field

The 2025 W-2 form was never updated to include the new overtime reporting codes. Per IRS Notice 2025-69, there are "no changes to the 2025 Form W-2" for the new reporting requirements. Box 12 exists on the form, but the code TT for qualified overtime doesn't take effect until 2026. There's simply no designated field for it on the 2025 W-2.

This wasn't DFAS "opting out" of reporting. There was no mechanism to report it in the first place.

Some firefighters saw a qualified overtime figure on their December LES. But that number only reflects additional overtime you picked up beyond your normal tour—callbacks, holdovers, extra shifts. It does not include your 38 hours of in-tour 7(k) overtime that you work every pay period as part of your standard 144-hour schedule.

This is a big deal because for most federal firefighters, the in-tour overtime is the majority of your qualified overtime. If you worked a full year with no additional OT, you still earned approximately 988 hours of FLSA-required overtime (38 hours × 26 pay periods). DFAS captured none of that.

Bottom line: Ignore whatever DFAS reported on your December LES. Your W-2 won't have a separate overtime figure because the 2025 form has no place for it. You need to calculate it yourself.

How to Calculate Your 2025 Qualified Overtime Deduction

Per IRS Notice 2025-69, you can use a "reasonable method" to calculate your deduction for 2025. For federal firefighters paid at time-and-a-half, the divide-by-3 method works:

Qualified Overtime Deduction = Total Overtime Pay ÷ 3

Here's how to get your total overtime pay:

1. Pull your 2025 LES statements (all 26 pay periods)
2. Add up all overtime earnings—this includes both your in-tour 7(k) overtime AND any additional overtime you picked up
3. Divide that total by 3

The result is your deductible amount, capped at $12,500 (single) or $25,000 (married filing jointly).

For a detailed walkthrough with examples—including how to handle step increases, promotions, or mid-year rate changes—check out my article on IRS Notice 25-69 and the divide-by-3 calculation.

What Changes in 2026

The 2026 W-2 form introduces a new Box 12 code: TT (Total amount of qualified overtime compensation).

Starting with wages earned in 2026 (which you'll file in early 2027), employers are required to report your qualified overtime in Box 12 using code TT. This should include all FLSA-required overtime—both additional OT and your in-tour 7(k) hours.

The key question for federal firefighters: Will DFAS actually report the full amount, including in-tour overtime? Based on their 2025 approach of only capturing picked-up OT, I'd keep your own records. If they only report additional OT again, you'll have documentation to support the correct figure.

A Warning for DIY Tax Software Users Filing 2026 Returns

Here's where it gets tricky. If DFAS underreports your qualified overtime in Box 12 code TT, DIY tax software like TurboTax or FreeTaxUSA will likely auto-populate that amount into Schedule 1-A. The software is designed to match what's on your W-2.

If Box 12 code TT shows $2,000 (just your picked-up OT) but your actual qualified overtime is $12,000 (including in-tour), the software may not let you easily override the W-2 figure without throwing errors or flags.

This is one reason working with a tax professional who understands federal firefighter pay becomes more valuable in 2026—we can properly document and claim the correct amount even when the W-2 is incomplete.

The 2026 draft W-2 also adds:

• Code TP for qualified tips (not relevant for most firefighters)
• Code TA for Trump Account contributions
• Box 14b for Treasury Tipped Occupation Codes

The deduction runs through 2028, so this reporting change should make future years easier—assuming DFAS implements it correctly.

What You Need to Do Now

For 2025 (filing now):

1. Ignore the December LES qualified overtime figure—it's incomplete
2. Calculate your own deduction using the divide-by-3 method on your total overtime
3. Keep your LES statements as documentation
4. Claim the deduction on Schedule 1-A (Form 1040)

For 2026 (preparing now):

1. Continue tracking your own overtime hours and earnings
2. Verify DFAS reports your full overtime in Box 12, code TT when the W-2 comes out
3. If their number is low, use your records to claim the correct amount

The deduction phases out starting at $150,000 AGI (single) or $300,000 (MFJ), and remember—only the premium portion (the "half" in time-and-a-half) qualifies, which is why you divide by 3.