Hello, @CarPal.

I understand the importance of correctly setting up your AL overtime exemption. Let me help you make sure that everything is in order.

Have you tried updating to the latest version again? It's possible that the previous update didn't install correctly. Let's give it another shot and see if that resolves the issue.

After updating the latest version, you might see this; if not, it only means that the updating is unsuccessful. See if you have the latest release available for your QuickBooks Desktop version:

• QuickBooks 2024 R4_21
• QuickBooks 2023 R9_120
• QuickBooks 2022 R13_58
• QuickBooks 2021 R16_16

Additionally, update errors can occur if you have more than one installation of QuickBooks Desktop of the same version year installed on the same computer (for example, QuickBooks Enterprise Solutions 18.0 and QuickBooks Premier 2018). If this happens, I recommend to download and installing a manual update for one or more versions of QuickBooks Desktop.

If you successfully update the new version, you may consider updating the latest tax table in QuickBooks Payroll to stay compliant with paycheck calculations: Get the latest tax table update in QuickBooks Desktop Payroll.

If you have any questions about setting up your AL overtime exemption, please leave a comment below, and we will respond to you as soon as possible.

QuickBooks Team

So what about folks that are on Quick Book online.    Is the fix for only QB desktop?

Hi there, @LDO.

Let me chime in and provide information about setting up correctly your Alabama (AL) overtime exemption in QuickBooks Online (QBO).

To start, the steps given by my colleague @ArielI is for QuickBooks Desktop (QBDT). For QBO, you'll have to first manually calculate the tax-exempt and add it to your employees when you create your payroll.

Example for tax-exempt calculation:

Your hourly employee is paid $15.00/hr. Their overtime (OT) rate is 1.5 x $15.00 = $22.50/hr. Your employee is paid every other Friday (bi-weekly).  

• Week 1 your employee worked 42 hours
• Week 2 your employee worked 40 hours
• Tax-exempt hours for the pay period = 2 (from week 1)
• 2 hours x 22.50/hr (OT rate) = $45.00 exempt pay amount

After manually calculating the tax-exempt, enter the tax-exempt amount in QuickBooks so the amounts will flow to the paycheck calculation and will reduce the amount of AL income tax withheld. Note: If you use Auto Payroll, you’ll need to follow the steps below to enter the amounts before your payroll is scheduled to run.

1. Go to Payroll, then Employees.
2. Select Run Payroll. 
3. From your employee list, select Actions, then Add tax-exempt pay.
4. Enter the tax-exempt pay dollar amount. 
5. Select Add.
6. Repeat steps 3 - 5 for each employee with tax-exempt amounts.

You can also view the amounts exempted in the following places:

• Paycheck list

1. Go to Payroll, then Employees. 
2. Select Paycheck list.
3. Select the paycheck you want to view. Or you can select the dropdown and edit the check if it’s eligible for correction. 

• Payroll Details report

1. Go to Reports. 
2. In the Find report by name field, enter Payroll details. 
3. Enter the paycheck date or period you want to view. 

• Pay stubs - Your employees can view the amounts on their pay stubs from QuickBooks Workforce.

For future reference, you can check this article to guide you in running, printing, and customizing payroll reports: Run payroll reports.

Please feel free to drop a comment below. If you have further concerns about the Alabama OT exemption or other QBO-related concerns. I will answer them in any possible way.

The instructions make no sense because they are lacking nouns.

"For QBO, you'll have to first manually calculate the tax-exempt __________?__________and add it to your employees ___________?_____________ when you create your payroll.

Please complete the blanks above so that I understand this.
Thanks

LDO