Alabama Overtime Exemption Still Not Working

I understand how you want someone to contact you with the updates of Alabama Overtime Exemption. I'm here to provide you to guide you on the what should be the process, PR Mgr.

After thorough evaluation, our engineers have determined that what is happening working as designed and isn't a bug of the program. To make sure sure that AL Overtime Exemption is calculating correctly and working fine, ensure that OT item being used with employees paychecks is the OT item created by the QuickBooks payroll program through the payroll item EzSetup display with the following name Overtime (x1.5) hourly.

If the item was created as custom item type, you'll have to create a new OT item using the payroll item EZ set up and merge the customer OT item into the New OT item created.

Once done add the new AL - OT Withholding Exemption to the employee profiles. To do so, follow the steps below:

1. Go to the Employees menu, then select Employee Center
2. Click the pencil icon on the upper-right corner.
3. Under the Payroll Info tab, click Taxes.
4. Under State, select the necessary information.
5. Click OK.

Moreover, learn how paying your state payroll taxes and filing the necessary forms on time throughout the year is an essential task. To know more, read this article for your reference: Set Up State E-file And E-pay In QuickBooks Desktop Payroll Enhanced.

Feel free to let me know if you  need anything else with the Alabama OT Withholding Exemption. I'll be one post away if you need further assistance. 

Even though the QuickBooks lady on Friday verified that all of my codes were set up properly, I went ahead and followed the procedures you outlined - created and merged a new overtime code - and it still did not work.  I entered 40 hours of straight time for an employee and the Alabama withholding was $17.96.  When I added 10 hours of the NEW overtime code, not only did the withholding not remain $17.96, it actually went down to $17.21.  I even set up a completely new overtime code (without merging) and ran a test paycheck for the same employee with that new code and still got the same results.  

What is your next set of instructions for me?

Hello there, PR Mgr.

I acknowledge the difficulties that can arise when things don't go according to plan, particularly with payroll and taxes. Allow me to direct you to the right support channel that can help you with setting up the Alabama Overtime Exemption on time.

We'll have to thoroughly review the setup for the payroll item to determine the root cause. I know that you've already reached out to our Payroll Support Team about your concern. However, I still advise contacting them again for further assistance. 

If you happen to have the case number from your previous call, make sure to share it with our specialists. This will enable them to access the notes and seamlessly pick up where they left off in resolving the issue.

To obtain the contact information:

1. In your company file, head to the Help menu at the top to select QuickBooks Desktop Help.
2. This action will take you to the Have a question? window.
3. From there, select Contact Us and give a brief description of your issue.
4. Click the Continue button and log in to your Intuit account.
5. If you don't have one, make sure to Create a new account.
6. Next, select Continue and Continue with my account.
7. We'll email you a single-use code and input the number. 
8. If you have more than one account, select the one you want to use and Continue.
9. Press the Continue button.
10. Choose chat with us to initiate a conversation or Have us call you to speak with an agent.
    
    

I/'ve included an article that delves into the topic of tracking the Alabama overtime exemption: Set up and track Alabama overtime exemption. It provides a thorough explanation of the payroll item and offers step-by-step instructions for reporting the tax-exempt amounts.

We have gathered resources that contain a checklist of tasks you must finish by the end of the year, along with details about the latest updates for your state:

• Year-end checklist for QuickBooks Desktop Payroll
• Learn about the new Alabama overtime rule for hourly employees effective January 1, 2024
  
  

Keep me posted if you have additional questions about setting up the Alabama overtime pay type and other payroll items. I'll get back to make sure this is taken care of for you. Have a good one, PR Mgr.

My problem was finally solved by Michael, a QuickBooks representative from Pennsylvania.  After speaking with more than a dozen different people at QuickBooks and being told a dozen different things, including SEVERAL that told me the programmers were still working on the problem, there was actually no problem.  Michael explained HOW the new calculation works and pointed me to a report to run that will give me the monthly total of exempt wages that I need to file my Alabama monthly tax return.  That report is under Employees and Payroll and is called the Payroll Item Detail Report.  Even though the AL-OT Exemption code shows zero on the employee's check, the amount is being collected and shows up on this report.  Had even one of the other dozen people that I've spoken/chatted/emailed with, including you, actually been trained properly and knew what they were talking about, I would have saved HOURS and HOURS of wasted time, not to mention the worry and frustration of not paying my employees properly.  This waste and frustration could also have been eliminated had QuickBooks bothered to disseminate a detailed explanation to all Alabama users about what was going to happen and the proper reports to run.  So, to answer your question, NO, you did not solve my problem.  MICHAEL solved my problem, and as best I can tell, he may be the one and only person that is answering the phone at QuickBooks that actually understands the questions the Alabama users have!!  Thank YOU Michael!

I'm so thankful you posted this but I have one question.  I like yourself see that on the individual paystub it is showing -0- beside the Al OT Withholding Exemption.  When I process the report you mentioned above it does show a total under the wage base for certain employees who had overtime.  So this is the number we will need to report is the actual wages that were exempt?

PR Mgr,   Do you use Quickbooks desktop or online version?  I use QB online payroll  Is the report that Michael showed you only available on the desktop version?   I cant find the " Payroll Item Detail Report" on the online version.

My employees stubs and payroll list all show zero exempt overtime.  I cant find one report that shows  expempt OT.  Because of this I am very neverous about the reports that are due soon.

I am very neAlso after reading the state of alabama website I am concerned how QB will  do their reporting.  Two reports are due soon  (1) the 2023 historical overtime data report  and the (2) the end of January 2024 report. (Ionly have 4 days to the report deadlines) 

Also I too have spent hours dealing with the QB pros to no avail.  I need this Michael that you referred to.
Thanks
LDO 

I use the desktop version so I am not any help with the QB Online.  I'm sorry.

LDO, we use QuickBooks Desktop, so I don't know the report you would run to get this information.  For me, it's under Reports and then under Employees and Payroll.  

To get the information needed to file your 2023 W-2's with the State of Alabama, you'll need the total number of employees that were paid overtime and the total amount of the allowable overtime paid.  I got this information from running a 2023 Payroll Summary, customizing it to only pull overtime pay items.  Per the new law, only overtime paid over 40 hours worked in a week is eligible.  Luckily for us, that is exactly how we pay our overtime.  If you pay daily overtime or include Holidays or Paid Time Off in your overtime calculations, this probably won't work for you, since you will likely have ineligible overtime lumped in with eligible overtime.  

Going forward with the monthly withholding submissions to Alabama, you will need those same 2 calculations - the number of employees paid overtime and the total amount of exempted overtime pay.  For Desktop users, this information is on the Payroll Item Detail.  Surely QuickBooks has something in the Online version that would give you this same information, but I wouldn't have any idea what that would be.  I'm sorry.

The actual calculations, at least for us, are working correctly.  I ran several test checks using different amounts of overtime hours and they each calculated correctly.  Per Michael, the amount of exempted overtime pay is not going to show on the employee paystub.  Unfortunately, the code will be listed on their paystub with a zero amount, which will probably lead to questions from your employees that actually look at their paystubs (another of those unexplainable situations QuickBooks has caused - if they are not going to show the amount on the paystub, why list the code???).

I hope this helps you.  This has absolutely been the most frustrating 6 weeks I've spent in my 30 years of processing payroll and we are looking into alternatives to QuickBooks for our Accounting needs.  This complete lack of knowledge by the customer service agents and lack of information dissemination to the Alabama users is inexcusable. 

Good luck! 

Yes, Ma'am.  Before I was aware of this report, I had actually calculated it manually and the amounts matched to the penny. 

PR Mgr,  

Your post was very helpful.  I have a few more questions that maybe you could help me with:

1. Why do you think that QB is going to file the 2023 Historical overtime report with the W2s?
After talking with QB this morning I do not think there is any plan for QB to file the 2023 Historical overtime report that the state of alabama requires to be filed by 1-31-23.   I was told that we must file the 2023 historical report on our own.   But how would we do this?  Can we mail it in?  I just checked on MYALABAMATAX and see no form.   

2.  You mentioned " going forward Monthly"  that we would need 2 calculations.  What am I supposed to do with these two calculations?  I don't file my forms.  QBO automatically files my monthly and quarterly forms.   (i filed my own monthly and quarterly forms from 1980 until 2009 and have since used Intuit payroll)   I do not have confidence that the monthly forms QB files for me will reflect this exempt overtime and hours.

 3.  Our employees see an EXEMPT Overtime line on their paystub but the number is  zero!!!!
     The only report that QB online payroll have that shows exempt OT is the "Payroll tax and wage summary"    I had a phone agent look all over my   QBO and she could find no other report that showed this.  Her instructions said go to the details report.   Exempt overtime shows zero on the QBOnline detail report.

Thanks
LDO 

Hello!

Setting up any exemptions can be tricky. We created a new article and I wanted to share this resource with all of you,  Set up and track Alabama overtime exemption .

If you still have additional questions after reviewing this article, please don't hesitate to reach out to us. We are here to help.

Enjoy your day!

Have you run your A-6 yet? It includes all wages paid. When you go to the details of the item, it will not let you select that it should only apply to OT. It is still clearly a coding error. 

Try to run an A-6; it proves there is still an issue. All of the wages are being reported as exempt before you actually got it to work right - I assume yesterday since the payroll we ran on Tuesday is still not flowing correctly. 

I use QuickBooks online payroll.  (not desktop),   My A6 shows correctly that i had 8 employees with overtime.  

But of the 8 names listed on the A6 only 5 of the exempt amounts are correct.   3 are wrong.

I shared this because this may also be an issue on desktop and at first glance it looks correct.  Just a heads up to check each individual employees exempt overtime amount. 

LDO

I use QuickBooks Desktop and my A-6 ran correctly today.  The number of employees with exempt overtime wages was correct and the amount of exempt overtime wages matched exactly to the Payroll Item Detail report that I ran to verify the numbers. 

I'm wondering if some of the problems other Alabama folks are encountering is due to different "types" of overtime wages.  We only pay overtime after 40 hours worked in a week - no daily overtime and Holiday and Paid Time Off hours do not count towards their 40 hours in the overtime calculation, meaning we only have one overtime pay code for hourly employees.  This coincides with the exemption qualification in the new law and makes the QuickBooks calculations very easy for us to verify.

The A-6 IS WRONG.

We set up the AL OT - Other Tax and followed the wizard for all of our clients. We ensured that AL withholding did not go up when overtime wages were entered each payroll. Further, we ensured that AL withholding did go up for non-overtime wages paid. All SEEMED to be working correctly.

However, when we just ran the A-6, it included ALL employees on the 'total # of employees who had exempt overtime wages' when several did not. It also included ALL compensation paid on the 'total exempt wages paid' line instead of just the overtime. This is wrong. 

I have read the explanation that the individual payroll items (hourly, salary, overtime 1.5, etc) had to be setup using the EZ wizard. I can't see how that would be the issue because if QB is including all compensation on the A-6 form as 'exempt from withholding', that would seem to indicate that QB is treating all of the compensation as overtime that is NOT subject to Alabama withholding. If that were the case, there would be 0 AL withholding on any of the paychecks. There was, though so that can't be right. 

We need this fixed ASAP as monthly reports are due in 13 days. 

Hello there, @noidea1364984.

Your A6 forms depends on your Alabama Overtime payroll setup in QuickBooks Desktop. That said, I recommend contacting Payroll support to ask assistance in reviewing and if you need some adjustments.

Here’s how:

1. Open QuickBooks.
2. Go to Help, then select QuickBooks Desktop Help/Contact Us.
3. Select Contact Us.
4. Give a brief description of your issue, then select Continue.
5. Sign in to your Intuit account, and select Continue and then Continue with my account.
   • If you don't already have an account, make sure to Create a new account.
6. We'll email you a single use code. Enter your code and select Continue.
   • If you have more than one account, select the account you want to use and then Continue.
7. Select to chat with us or Have us call you.

For future reference, here is an article you can read about year-end checklist: Year-end checklist for QuickBooks Desktop Payroll.

Feel free to click the Reply button below if you have questions about payroll set up in QuickBooks Desktop. I'm always here to help. Have a great day.

I assure you, as the payroll manger for 7 years here, my issue is not set up by an item error. This issue is caused by the checks being created on the old tax table before the coding was correct in time for the 2024 payroll runs. 

I tested it by running an out of schedule paycheck on the new table and it calculated correctly. QB needs to run a patch to make all Alabama checks for 2024 run on the new table. 

I appreciate the steps you performed, Sam.

Alabama Overtime Exemption setup is reflected in both paycheck and W-2 forms. For more detailed information, refer to this article: Set up and track Alabama overtime exemption.

In case you need guidance in creating, managing, assigning, or updating pay schedules, you can check out this article: Set up and manage payroll schedules.

Feel free to comment if you have any follow-up concerns regarding the Alabama Overtime Exemption. The Community is here to help.

I do not need guidance. I need you to read, comprehend, and act. The A-6 is still not flowing correctly. The W-2s are not even showing the exemption item - hopefully this issue will be resolved by the 2024 W-2 filing season.  I have run a full QB updated and a full payroll update.  We pay for a payroll service (way too much for how terrible it is, honestly), but still we do pay for it. It is Intuit's responsibility to ensure the payroll runs correctly. I am telling you the issue, I am telling you how I proved the issue, and I even made a suggestion to solve the issue. All you are doing is blowing me off. If my items were not correct in the first place, I would not have been able to produce a correctly flowing check - so the problem is not with me. The problem lies with your software updates and delayed release of tax tables. MAKE A RETROACTIVE PATCH TO CORRECT ANY CHECKS RUN WITH A 2024 DATE. 

Just to confirm, I'm seeing the same issue here on the A6 - the total wages paid is getting inserted into the OT Wages Paid field on the generated A6 form.

Again, I can confirm this same behavior with the A6, and it should not be our responsibility to individually contact Intuit with the same problem over and over.  Either post a way to fix it for everyone, or determine there is a systemic issue that needs patched and get it out the door now.

So where is QuickBooks on this? Why hasn't it been solved. It has bene over a week since your last response. Not out of the ordinary but super frustrating. My A-6 is still wrong. This is going to cause issues for the Alabama reporting, and you dropped the issued. 

I understand that time is of the essence for resolving this issue, sam_h. No worries, I'm here to ensure you'll get past this.

In QuickBooks, it's required that you only use the Overtime (x1.5) hourly item created by the QuickBooks payroll program with your employees' paychecks. If a custom Overtime (OT) item was created, you must take action. Create a new OT item via payroll EZ setup and merge the custom item into the new one.

To set up the item through the EZ Setup. Here's how:

1. Click on the Lists menu, then select Payroll Item List.
2. At the lower left of the Payroll Item List, click Payroll Item, then select New.
3. Select EZ Setup, then click Next.
4. Follow the onscreen instructions and tick the necessary radio buttons that apply.
   
   

Next, add a new Alabama-Overtime (AL - OT) Withholding Exemption to employees' profiles by going to:

1. Employee menu, then select Employee Center.
2. Click Edit Employee, then select Payroll Info.
3. Then click on Taxes, then select the Other Tax tab. Make sure to add the item to the list.
   
   

Additionally, you'll need to create the new Alabama-Overtime (AL - OT) Withholding Exemption payroll item (one-time only).

Here's how:

1. Get the latest payroll update. The Add Item Wizard will launch and take you through setting up the AL - OT Withholding Exemption payroll item.
2. Go to Employees, then select Employee Center.
3. Double-click your employee. Select Payroll Info.
4. Click on Taxes, then select the Other tab. Add the new AL - OT Withholding Exemption item. Then, click OK.
5. Repeat steps 3-5 for each full-time hourly employee.
   
   

Also, please note that the AL-OT Withholding exempt item will show 0.00 on the employee's paychecks/pay stubs. This item is for tracking/filing purposes only.

You may refer to this article for more details:

• Set up and track Alabama overtime exemption
• Set up and manage payroll schedules
• New Alabama Overtime Withholding Exemption Rule
  
  

Moreover, you can find reports about employee info, wages, taxes, deductions, and many more in your QuickBooks Payroll by creating a payroll summary report in QuickBooks.

Please keep me informed if you have additional payroll concerns. I'll be here anytime to provide the necessary assistance.