If you worked in a tipped job last year (restaurant, hotel, rideshare, salon) or picked up overtime shifts, you have a new deduction available for 2025 taxes. Schedule 1-A is brand new. The IRS published final guidance just before filing season opened, which means software companies had a narrow window to build support for it.

Some handled it. Some didn’t. Some technically support it but bury the inputs where you’d never find them without knowing exactly what to look for.

Here’s what we found after testing the major platforms.

Quick Verdict: Schedule 1-A Software Support

Platform	Schedule 1-A	Tips Deduction	Overtime Deduction	Cost
TurboTax Free	Yes	Yes	Yes	$0 federal
TaxSlayer Pro	Yes	Dedicated menu	Dedicated menu	$0-$24.95
H&R Block Free	Yes	Yes	Yes	$0 federal
FreeTaxUSA	Yes	Yes	Yes	$0 federal
Cash App Taxes	Yes	Yes	Yes	$0
TaxAct Free	Partial	W-2 only	Limited	$0 federal

Best for tip workers: TaxSlayer Pro (dedicated Schedule 1-A menu, clearest walkthrough) Best free option: FreeTaxUSA (handles transition-year complexity, free federal) Most likely to miss the deduction: TaxAct (requires paid upgrade for full Schedule 1-A)

What Schedule 1-A Actually Is

The Tax Relief for American Workers Act of 2025 created Schedule 1-A as an above-the-line deduction. You don’t need to itemize. You claim it regardless of whether you take the standard deduction. For most tip and overtime workers, this is the only new deduction that directly affects them.

The limits:

• Tips: Up to $25,000 single, $37,500 married filing jointly, for W-2 tip income
• Overtime: One-third of qualified overtime pay, capped at $12,500 single, $25,000 married
• Car loan interest: Deductible for new vehicle loans on US-assembled vehicles
• Enhanced senior deduction: Additional $6,000 for taxpayers 65+

A server making $18,000 in tips could save $2,700-$3,600 depending on their bracket. An overtime worker who pulled $15,000 in OT could deduct $5,000 of it.

The form is new, the IRS guidance was late, and some software companies are still catching up. Several platforms released Schedule 1-A support in mid-February 2026 updates, weeks into filing season.

The Complication Nobody Warned You About

Your W-2 might not clearly separate overtime pay from base pay. That’s the real problem.

Box 1 on your W-2 (Wages, tips, other compensation) is a total figure. Overtime isn’t required to be broken out unless your employer has done so voluntarily in Box 14. Tips are required to be reported in Box 8 (allocated tips) and Box 12 with Code D, but even that reporting isn’t always complete.

For the overtime deduction, you often have to calculate it yourself: take your pay stubs, total your overtime hours at time-and-a-half, and enter that number. The software can’t do this for you if the data isn’t on your W-2.

This is where the platforms diverged significantly in our testing. Some explain the calculation. Some give you a blank box with no guidance. Some tell you they need Box 14 data that may not exist.

TurboTax Free: Supports It, But You Have to Find It

TurboTax added Schedule 1-A support in a February 2026 update. The good news: it works. The less good news: you don’t encounter it unless you indicate during the interview that you received tips or overtime pay.

The flow: W-2 import, income questions, then if you flag tips or overtime, TurboTax routes you to Schedule 1-A. If you import your W-2 electronically and Box 8 populates, the tips section appears automatically. Typing in your W-2 manually requires you to know to look for Box 8.

For overtime: TurboTax asks whether you received overtime pay, you enter the total, it calculates the one-third deduction. What it doesn’t do is explain how to find that number if it’s not on your W-2. There’s a help article linked, but you have to click through to find it.

Who it works well for: Tip workers with Box 8 and Box 12 Code D already populated on their W-2. Electronic import makes this automatic.

Where it falls short: Overtime workers who need to calculate their OT total from pay stubs. TurboTax assumes you have the number, not that you need to figure it out.

Cost: Free for Schedule 1-A filers. TurboTax Free Edition covers W-2 income plus Schedule 1-A. You won’t get pushed to paid unless you also have self-employment income.

TaxSlayer Pro: The Best Implementation We Tested

TaxSlayer added a dedicated “Schedule 1-A — Tips and Overtime” menu entry for 2026. It’s not buried in the income interview flow. It’s a first-class section you navigate to directly.

The menu walks through each component in sequence: tips income (with instructions on how to find it on your W-2), overtime calculation (with a step-by-step guide if Box 14 isn’t populated), car loan interest, and the senior deduction.

The overtime walkthrough is the most useful we saw. It explains: if overtime pay isn’t in Box 14, use your final December pay stub to calculate total annual overtime hours times your OT hourly rate. Enter that number. TaxSlayer computes the one-third deduction automatically.

For restaurant employees and gig workers without meticulous payroll records, having that calculation explained in the software is worth a lot. Most platforms assume you already have the number.

Who it works well for: Anyone with tips or overtime who wants explicit guidance.

Where it falls short: TaxSlayer’s free tier is narrower than TurboTax’s. Simple W-2 returns qualify, but you may hit a paywall for state returns or additional income.

Cost: Free for basic returns. TaxSlayer Classic runs $24.95 federal for more complex situations.

H&R Block: Solid, With One Catch

H&R Block’s interview flow handles Schedule 1-A without drama. The tips section appears when you enter Box 8 data from your W-2. Overtime appears as a follow-up question after you enter Box 1 wages.

The one catch: H&R Block’s interface asks for “total overtime wages earned in 2025” but doesn’t explain how to find or calculate that number if your W-2 doesn’t break it out. Experienced filers will know to check pay stubs. First-time Schedule 1-A filers might enter $0 or skip it because they don’t have the number handy.

H&R Block’s AI Tax Assist, included with paid plans, can answer follow-up questions about the calculation. But that feature requires a paid plan ($35+), and many tip workers won’t pay for a tax software upgrade they don’t otherwise need.

Who it works well for: Filers who already know their overtime total, or who are willing to pay $35 for the Deluxe plan with AI Tax Assist included.

Where it falls short: Free tier doesn’t include AI Tax Assist. The overtime field has no embedded help for calculating the number from scratch.

FreeTaxUSA: Best Free Option for Complex Situations

FreeTaxUSA handles the transition-year complexity better than most. It does two things the others don’t.

First, it flags that tip income in Box 8 and Box 12 may differ from your actual cash tips and explains which number applies to the deduction. (Box 8 is the employer’s estimate. Actual tips belong in Box 7. FreeTaxUSA explains this. Nobody else does.)

Second, the overtime section includes a built-in calculator. Enter your hourly OT rate and total hours, and it computes the dollar amount for you. Or enter a dollar amount directly. Either path works.

No other free platform does both. The tradeoff is interface polish. FreeTaxUSA looks dated. If you can get past the aesthetics, the tax accuracy is excellent.

Cost: $0 federal, $14.99 state. That’s the best value for tip and overtime workers this filing season.

Cash App Taxes: Works, But No Guidance

Cash App Taxes supports Schedule 1-A with no income limit and no cost. Federal and state both free.

The implementation is minimal. You’ll see the Schedule 1-A fields, enter your numbers, and the software computes the deduction. What you won’t get is any explanation of how to find those numbers or what to do if your W-2 doesn’t have the right boxes populated.

For filers who know what they’re doing (experienced tip workers who tracked their income, overtime workers who’ve already pulled their pay stubs) Cash App Taxes works fine. For anyone who needs help with the calculation, you’re on your own.

Who it works well for: Self-sufficient filers who have their numbers ready and just want a free platform to file.

TaxAct: Requires Paid Tier for Full Support

TaxAct’s free tier handles Schedule 1-A for basic tip income but pushes overtime workers to the paid plan ($29.99 federal). If your overtime total isn’t in Box 14 of your W-2, TaxAct Free can’t complete the calculation without an upgrade.

This matters because most W-2s don’t have overtime in Box 14 unless your employer specifically codes it there. For servers, hotel workers, and retail employees with W-2 income from large employers, Box 14 is often blank. TaxAct Free will flag this and suggest you upgrade.

There’s no reason to pay TaxAct $29.99 for this when TurboTax, FreeTaxUSA, and Cash App Taxes handle the same situation for free.

The IRS Direct File Situation

Direct File is gone for 2026, eliminated by the Trump administration in early 2025. Millions of people who used it last year need a new option. If that’s you and you have tips or overtime income, the choices above are your realistic alternatives.

The full breakdown is in our guide to free tax alternatives after Direct File’s elimination. Short version: IRS Free File via 1040.com or FreeTaxUSA for most people, Cash App Taxes if you’re over the $89,000 AGI limit.

What Software Gets Wrong About Schedule 1-A

The biggest failure across most platforms isn’t whether they support Schedule 1-A. They all do now. It’s that they assume you come in with clean data.

Real tip workers often don’t. Three restaurants in 2025 means three W-2s with tip data that may or may not be properly coded. Rideshare drivers see tips reported differently across Uber, Lyft, and DoorDash. Nail techs who rent booths and file Schedule C find that tips interact with self-employment income in ways that Schedule 1-A doesn’t fully resolve.

The software can only deduct what you tell it to enter. The recordkeeping responsibility is yours.

For anyone with variable tip income, the IRS recommends logging tips daily and reconciling monthly. If you didn’t do that in 2025, your best resource is your employer’s tip records and your bank deposits. The IRS Free File and AI tax tools guide covers AI-assisted platforms that can help work through this data-gathering step.

Comparing the Platforms

TurboTax Free

• Tips auto-detect: Yes, if Box 8 is imported
• OT calculation help: No
• Explains missing Box 14: No
• Free for tip workers: Yes

TaxSlayer Pro

• Tips auto-detect: Yes
• OT calculation help: Yes, step-by-step
• Explains missing Box 14: Yes
• Free for tip workers: Partially

H&R Block Free

• Tips auto-detect: Yes
• OT calculation help: No
• Explains missing Box 14: No
• Free for tip workers: Yes

FreeTaxUSA

• Tips auto-detect: Yes, with explanation of Box 7 vs Box 8
• OT calculation help: Yes, built-in calculator
• Explains missing Box 14: Yes
• Free for tip workers: Yes ($14.99 for state)

Cash App Taxes

• Tips auto-detect: Yes
• OT calculation help: No
• Explains missing Box 14: No
• Free for tip workers: Yes

TaxAct Free

• Tips auto-detect: Partial
• OT calculation help: Requires paid upgrade
• Explains missing Box 14: No
• Free for tip workers: No, not for overtime

Who Should Use What

Server or bartender, one W-2, Box 8 populated: TurboTax Free or H&R Block Free. Either handles automatic detection without extra steps.

Hotel or retail worker with overtime not clearly on your W-2: TaxSlayer Pro or FreeTaxUSA. Both walk through the calculation from pay stubs. Skip Cash App Taxes and TaxAct for this.

Tips from multiple jobs or complex reporting: FreeTaxUSA. It’s the only free platform that explains the difference between allocated tips (Box 8), reported tips (Box 7), and what the deduction covers.

Gig worker with tip income (Uber Eats, DoorDash): Most gig tips show up on a 1099, not a W-2. Schedule 1-A is for W-2 tip workers. If your tips are in a 1099-NEC or 1099-K, that’s Schedule C income. FreeTaxUSA handles Schedule C free for federal.

Fastest path through a straightforward W-2 return with tips: TurboTax Free. Electronic import of a W-2 with Box 8 populated catches the Schedule 1-A deduction automatically.

The Dollar Stakes

This deduction is real money for a lot of people. The IRS projects about 4 million tip workers will claim the deduction this filing season, with an average benefit of around $1,500. Overtime workers average closer to $2,000 in savings.

That math makes it worth taking an extra 20 minutes to verify your W-2 has the right data and to calculate your overtime total from pay stubs if your employer didn’t break it out. Even if you have to request your year-end payroll summary from HR, it’s worth the call.

TaxSlayer Pro and FreeTaxUSA make that 20 minutes shorter by explaining the calculation. The others assume you already have the number, adding friction for people who earn tips and overtime for a living and may not think of themselves as the type to go digging through payroll records.

After you file and your refund comes in, the best apps to invest or save your tax refund covers what to do with the money once it lands.

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FAQ

Does TurboTax Free support Schedule 1-A? Yes. TurboTax Free Edition added Schedule 1-A support in February 2026. Tips are detected automatically if Box 8 is populated on your W-2. Overtime requires you to enter the total, then TurboTax calculates the deduction. Federal filing is free for eligible W-2 returns.

What if my overtime isn’t in Box 14 of my W-2? Most W-2s don’t break out overtime in Box 14. Calculate your total from pay stubs: add up every paycheck where you worked over 40 hours at time-and-a-half. That total goes in the Schedule 1-A overtime field. TaxSlayer Pro and FreeTaxUSA both walk you through this in the software.

Can gig workers use Schedule 1-A for tips? Schedule 1-A covers W-2 tip workers. If your tips come through a 1099-NEC or 1099-K (common for DoorDash and Uber Eats), you’re dealing with Schedule C income, not Schedule 1-A. FreeTaxUSA handles Schedule C for free on federal.

Is IRS Direct File still available for 2026? No. The Trump administration eliminated IRS Direct File in early 2025. Use IRS Free File, FreeTaxUSA, or Cash App Taxes instead. We’ve compared them all in our Schedule 1-A software comparison.

What’s the maximum Schedule 1-A deduction for overtime? One-third of your qualified overtime pay, up to $12,500 for single filers and $25,000 married filing jointly. Earn $30,000 in overtime as a single filer: deduct $10,000. Earn $50,000: capped at $12,500.

Does H&R Block support Schedule 1-A in the free tier? Yes. The limitation: H&R Block Free doesn’t include AI Tax Assist, so no in-software help calculating overtime from pay stubs. For that guidance, use TaxSlayer Pro or FreeTaxUSA. Full comparison in our TurboTax vs H&R Block review.

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Tested March 2026 using each platform’s current software version. Schedule 1-A guidance is based on IRS final regulations published December 2025. Software features and pricing may change during filing season. Verify before starting your return. Not personalized tax advice.