CAL FIRE Overtime Tax Deduction Guide | Cal Fire Firefighters

🚒CAL FIRE OVERTIME · FEDERAL TAX DEDUCTION🔥

One Big Beautiful Bill: Overtime Tax Break for CAL FIRE Firefighters

For tax years 2025–2028, CAL FIRE and other fire-service personnel may get a federal tax deduction on the premium portion of qualifying overtime pay — but only when it meets the federal FLSA §7(k) rules.

🧯Bottom line:
If your overtime pushes you over the FLSA firefighter threshold, the premium (the extra above your regular rate) may be deductible at the federal level.

🔥 TL;DR 🔥

1. Your federal OT threshold is ~212 hours every 28 days.
Not weekly. Not daily. 212 in 28 days — that’s the magic number.

2. Let's say you work 264 hours every 28 days.
That means, you are already 52 hours over the federal limit every single pay cycle.

3. Those 52 hours are automatically “FLSA overtime.”
That means they’re the hours that qualify for the new tax break.

4. The deduction is only for the premium part of those FLSA OT hours.
Example:

Regular rate: $40/hr
OT rate: $60/hr
Premium (deductible part) = $20/hr

So → 52 hours × $20 premium = $1,040 possible deduction per cycle (before annual caps).

5. Any extra OT (holdovers, deployments, fires, forced backfills) also counts
…as long as it pushes you above 212 hours in the 28-day period (which almost everything does).

🚒 Super Short (Truckie) Version 🚒

If you work over 212 hours in 28 days (you do),
then the extra OT premium (the extra 0.5x) is deductible on your federal taxes.
Your usual 52 OT hours already count — plus any extra from fires/holdovers.

🧯2025–2028 “No Tax on Overtime” Income Thresholds🧯

Single | Head of Household

Up to $12,500 overtime deduction

Full benefit: MAGI up to $150,000
Phaseout range: $150,000 – $400,000
No benefit: MAGI $400,000+

For W-2, non-exempt employees.

Married Filing Jointly

Up to $25,000 overtime deduction

Full benefit: MAGI up to $300,000
Phaseout range: $300,000 – $550,000
No benefit: MAGI $550,000+

Must file a joint return to qualify.

Married Filing Separately

Not eligible for this deduction

Does not qualify for the “No Tax on Overtime” rule.
If you qualify as Head of Household, use the HOH rules instead.

Consider filing jointly or as HOH where appropriate.

Phase-Out Reduction: The deduction amount decreases by $100 for every $1,000 by which MAGI exceeds the threshold.

Based on federal law and IRS guidance currently available for tax years 2025–2028. Thresholds use Modified Adjusted Gross Income (MAGI) and may change with future legislation or regulations.

💵The Detailed Roundtable Version 💵

📘1. What Is the Overtime Deduction Under One Big Beautiful Bill?

The One Big Beautiful Bill Act (OBBBA) creates a new federal income tax deduction (for 2025–2028) for the premium portion of qualifying overtime pay. This applies to CAL FIRE firefighters and other fire-service employees covered by the FLSA §7(k) exemption.

Premium portion — the only part that counts

The IRS is focused on the premium, not the whole overtime rate.

Example:

Regular rate: $40/hr
Overtime rate: $60/hr
Premium portion: $20/hr → that extra $20/hr is the part that can be deductible.

Federal deduction limits (per year)

$12,500 – Single
$25,000 – Married filing jointly
Deduction begins to phase out around $150,000 MAGI (single) or $300,000 MAGI (joint).

Important: This is a federal-only deduction. California currently does not mirror this deduction, so your California state tax stays the same.

⏱️2. FLSA §7(k) Work Period Rules for Firefighters

Firefighters are not on the standard “40-hour workweek” rules. Under FLSA §7(k), CAL FIRE can use a work period of up to 28 days. Overtime eligibility is based on hours above the federal threshold for fire protection personnel.

🔥 FLSA 7(k) snapshot

Work period: up to 28 days
Typical fire protection threshold: around 212 hours per 28-day period
Hours above that threshold = FLSA overtime

✅ When overtime can qualify

Overtime that exceeds the FLSA 7(k) threshold may qualify for the new deduction. Only the premium portion of that FLSA overtime is deductible, up to the annual limits.

🚒3. Forced Holdover vs. Regular Schedule: What Counts?

Most confusion comes from the difference between forced holdover shifts and normal, scheduled overtime. The IRS cares about how your total hours stack up in the 28-day FLSA work period, not just whether the overtime felt “forced” or “regular.”

A. Regular, scheduled overtime

This includes your usual 72-hour shifts, normal CAL FIRE schedules, and planned deployments. These hours may qualify once your total hours in the 28-day period go over the FLSA threshold.

B. Forced holdover (mandatory overtime)

Forced holdover happens when you are ordered to stay:

Staffing shortages
Relief doesn’t arrive
Emergency coverage

Key rule:
Forced holdover hours still have to push you above the FLSA threshold for the premium portion of that overtime to qualify for the deduction.

C. California daily overtime and double time (state-only)

California has extra overtime rules (over 8 hours/day, over 12 hours/day, and double time). These are state law rules, not federal FLSA rules.

These usually do not qualify for the new federal deduction by themselves:

Daily overtime triggered only by CA’s rules
Double time based on CA labor law
Contract-only enhancements not required by FLSA 7(k)

📊4. Simple Scenarios for CAL FIRE Firefighters

Scenario 1

✅Regular overtime over FLSA threshold

You work a busy 28-day period:

Total hours: 264
FLSA threshold: 212 hours
Excess FLSA overtime: 52 hours
Premium portion: $20/hr

Deductible premium: 52 × $20 = $1,040 possible deduction per cycle (before annual caps).

✅ Qualifies for deduction

Scenario 2

✅Forced holdover pushes you over the line

You are scheduled for 210 hours in a 28-day period.

Forced holdover adds: 10 hours
New total: 220 hours
Excess FLSA overtime: 8 hours (220 – 212)

The premium on those 8 hours may qualify for the deduction.

✅ Qualifies (only the hours over the FLSA threshold)

Scenario 3

⚠️Forced holdover but still under FLSA threshold

You work 200 hours in the period and are forced to stay an extra 8 hours (total 208).

The FLSA threshold is still 212 hours, so you never cross it.

🚫 Does not qualify (even though it was forced)

Scenario 4

🚫Daily California overtime only

You work 9 hours in one day, so you get 1 hour of overtime under California’s over 8 hours/day rule. But your total in the 28-day period stays below the FLSA threshold.

🚫 Does not qualify – state-only overtime

Scenario 5

🔥Strike team / major incident deployment

A long fire season deployment pushes your hours well over 212 hours in multiple 28-day periods. Most of your overtime in those periods is FLSA overtime.

The premium portion of that FLSA overtime may generate a significant deduction, subject to the annual limits and income phaseouts.

✅ Often qualifies – big planning opportunity

🧮5. What CAL FIRE Payroll Must Track (and What You Should Watch)

Employer & payroll responsibilities

For the deduction to work smoothly, CAL FIRE (your employer) needs to:

Track FLSA-qualifying overtime separately from California-only overtime.
Identify the premium portion of FLSA overtime.
Provide the qualifying amount for W-2 informational use.

Your firefighter checklist

✅ Save pay stubs that show federal vs. state overtime if available.

✅ Ask payroll how they code FLSA 7(k) overtime versus California daily overtime.

✅ Track your total hours across each 28-day work period (not just weekly).

✅ Keep a list of forced holdovers and major deployments (incident names and dates).

✅ At tax time, bring your overtime breakdown to your tax professional so the premium portion can be calculated correctly.

🌉6. Federal vs. California Tax Treatment

Under current guidance, the One Big Beautiful Bill overtime premium deduction is federal only.

Federal return: You may claim a deduction for the premium portion of qualifying FLSA overtime.
California return: California does not currently match this deduction, so state tax stays the same.

Good news: Even though your regular pay is still fully taxable, your qualifying FLSA overtime premium may finally give CAL FIRE crews a targeted tax break during fire season.

Tandy Consulting Inc. proudly supports firefighters and public safety professionals across Fullerton and Orange County, California. We help you understand how the One Big Beautiful Bill applies to your specific overtime patterns, shift schedules, and income levels.

Ready to run your CAL FIRE overtime numbers under One Big Beautiful Bill?
Talk with Tandy Consulting Inc. about your specific work periods, income level, and filing status.

🚒 Schedule a Firefighter Tax Review

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