Key facts
- Internal IRS data includes returns accepted through August 2.
- The average overtime tax break deduction nationwide was $3,149.
- Taxpayers earning over $200,000 claimed an average of $7,781.
- In territories, those earning $50,000-$100,000 claimed $6,751, more than double the national average for that income group.
- Those earning $100,000-$200,000 in territories claimed $8,543.
Internal IRS data reveals that taxpayers in US territories claimed significantly larger overtime tax break deductions compared to the national average. While deductions across all states were claimed, the average deduction in territories was substantially higher for lower-income earners and showed less variation across income levels. For instance, individuals earning between $50,000 and $100,000 in territories claimed $6,751, more than double the national average for that income group. Experts suggest potential reasons for these larger deductions include industries with high overtime, possible taxpayer errors due to inconsistent information reporting, or individuals using territorial addresses while working in the continental US or Hawaii.