Hospital nurses routinely log 300–500 overtime hours a year, and under the 2025 law the premium portion of that time-and-a-half — the extra "half" — is deductible from federal taxable income, up to $12,500 ($25,000 on a joint return). An RN at $40/hour picking up one extra shift a week can easily generate a $5,000–$8,000 deduction.
The catch for nurses specifically: hospital pay stubs itemize shift differentials, charge pay, call pay, and overtime together, and none of them label the FLSA premium portion. Only FLSA-required overtime — hours past 40 in a workweek — qualifies; a night differential or weekend premium isn't overtime premium. That ambiguity is exactly why so many nurses' 2025 returns claimed nothing.
W-2 staff nurses qualify. Travel nurses qualify on the overtime portion of their pay (though tax-free stipends never were taxable and don't factor in). Per-diem 1099 nurses generally don't — no employer, no FLSA overtime. If your 2025 return missed the deduction, a 1040-X recovers the difference, and the deduction runs through 2028.