Overtime on a 1099? Rare But Possible
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Overtime on a 1099? Rare But Possible
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About this listen
In this episode of Information Return Intelligence, Jason revisits last week’s big topic: the new overtime deduction created by the One Big Beautiful Bill (OBBB). After initially believing there was no scenario where qualifying FLSA overtime could ever appear on a 1099… Jason discovered there is a rare situation where it actually can.
Join Jason as he breaks down:
- What counts as “qualifying overtime” under the OBBB
- Why Section 7 of the FLSA is the key to the deduction
- Why most overtime won’t qualify
- Why overtime is almost always reported on a W-2
- And how — in extremely unusual cases — it might legitimately show up on a 1099
Using IRS Notice 2025-69, Jason explains how a worker can be an employee under the Fair Labor Standards Act (DOL’s economic-realities test) while still being treated as a contractor for tax purposes (IRS three-factor test).
It’s rare. Think unicorn rare.
But it’s not impossible — and if it happens, employers need to know exactly why.
If you deal with 1099s, W-2s, worker classification, or compliance in general, this episode is a must-listen.