Has intuit desktop payroll software service been revised to include the new no tax on overtime wages law?

Good evening, @TanyaS1.

How are you doing today? I hope all is well.

Right now, there’s no official date for when QuickBooks Desktop Payroll will be updated to reflect the new federal law signed in July 2025. This law, part of the One Big Beautiful Bill Act (OBBBA), allows eligible employees to exclude overtime and tip income from their federal taxable income when they file their tax returns, starting with the 2025 tax year.

For now, we recommend continuing to run regular payroll updates to ensure your software stays current with any new tax table changes.

In the meantime, it might be helpful to track overtime and tip wages separately to make tax filing easier for your employees when they claim the deduction on their 2025 returns.

Feel free to reach out anytime if you have questions or need a hand. Have a wonderful day!

There may be no update coming, but not sure. As I understand it, the way this will be implemented is that the employee will initially be taxed and then will conditionally get the tax back when they file their 1040.  If so, then no changes will be needed.

It will need to appear on their W2 so there is going to have to be some change so that it can be accumulated and properly place in whatever new field will be on the W2

Is there anymore updates available on the not taxes on overtime change?  Will there be a software update?

Thanks, 

Thank you for reaching out to the Community forum, @ILY2.

At this time, QuickBooks Desktop (QBDT) Payroll has no official update for the new federal law signed in July 2025, which allows eligible employees to exclude overtime and tip income from federal taxable income.

To help you obtain more details on what's included in the latest QuickBooks payroll update, check out this article: QBDT Payroll Update 22514.

Please stay tuned for announcements. If you have further questions, don’t hesitate to ask!

Good morning, wondering if there has been any update on QB Payroll and the OBBB for W2s.

We’re waiting for the IRS to release official instructions regarding the One Big Beautiful Bill (OBBB) Act, VC NCC.

Currently, we don’t have specific information regarding W-2 reporting rules aligned with OBBB but will ensure compliance with IRS guidelines for any payroll updates. For accurate and timely information, visit our  QuickBooks Blog post or check the IRS News releases.

If you need further clarification or have questions about how these changes will affect payroll or employee filings in QuickBooks, you can connect with our Live Support team by following these steps:

1. Open the Help menu and select QuickBooks Desktop Help.
2. Click on Contact Us.
3. Provide a brief summary of your issue, select Let's Talk, and choose your preferred method of communication.

For a detailed breakdown of the latest QuickBooks payroll update, you can also refer to this helpful article: QBDT Payroll Update 22514.

Don’t hesitate to reach out if you have additional questions-We’re always here to help!

Any updates on what QBO will be doing for payrolls that are automated in QBO and what they will be providing for overtime/wages to employees?

Hello, Elainie. I'll share the latest updates on payroll and overtime/wages in QuickBooks Online (QBO) in light of the newly passed "One Big Beautiful Bill Act".

The IRS has announced that there will be no changes to federal payroll withholding tables or tax forms for tax year 2025 related to this legislation. QBO Payroll will continue to calculate taxes, including those on tips and overtime, throughout the 2025 tax year.

For employees, the bill introduces potential tax deductions for tips and overtime that can be claimed during 2025 tax filings. However, it does not directly affect payroll processing or paycheck calculations.

As the IRS finalizes the specifics on how employees will report deductions, QuickBooks will monitor updates and send email notifications to keep customers informed of any changes. 

For more information about this topic, check out this resource: Details on the One Big Beautiful Bill Act and how it affects payroll.

Let me know if you have any additional questions.

Will QB Desktop break down any overtime wages and/tips on the 2025 W2 forms? Now that the IRS has released that employees will need the amounts in order to report as a deduction on their tax returns.

It would be really awesome if they would answer this for us as we have weeks before the year end and if we need to show this on 2025, some of us need to make sure the W2’s accurate before they send them to employees. So frustrating.

So I just logged in to run payroll and got a pop up asking about overtime and to answer one question, which I did, then the next screen told me we were all setup for the new OT rules for 2026.  I then proceeded to process payroll, but it gave me an error and kicked me out of QB all together.  I have attempted this multiple times with the same error popping up and kicking me out.  I did the PR update, I rebooted my computer and anything else I could think of.  It will not allow me to run payroll.  I called the PR Help desk and there was over an hour wait, so I am guessing this could be an issue they need to fix.  Anyone else had this happen yet?

Having the same issue.. on hold as well.

Hello, @Dixie11 and @mralt.

I understand how important it is for you to access QuickBooks Desktop to run payroll. I also appreciate the steps you've taken to resolve this and get everything back on track.

An "Unrecoverable Error" means QuickBooks closed unexpectedly. To resolve this, let's start with opening your company file with a different QuickBooks user. Here's how:

1. Go to Company, select Set Up Users and Passwords, then select  Set Up Users.
2. For the Enterprise users: Go to the Company menu, then select Users, then select Set Up Users and Roles.
3. Click the Add User..., type the username and password, then select Next. (Don't use the damaged user name.)
4. Customize the user as necessary, then select Finish.
5. Go to File, then click Close Company/Logoff.
6. Sign in to the company file using the new login credentials.

If the new user opens the file successfully, remove the user you're having problems with and create them again.

Also, if the error happens when you open your file as the admin user, run the QuickBooks File Doctor.

After following the steps and still encountering the same error, proceed with the other troubleshooting steps in this article: Troubleshoot Unrecoverable Error.

Let us know if you have further questions, we'll be right here to help you anytime.

We are having the same problem.  Quickbooks shuts down after setting up the BIG BEAUTIFUL BILL compliance. It happens for all users.  Your suggestions are not fixing the problem.

https://quickbooks.intuit.com/learn-support/en-us/employees-and-payroll/re-no-tax-on-overtime-provis...

Found this on another post.  Worked for me.  Sat on hold for over an hour - found this while waiting.  

I'm having the exact same issue you are.  So frustrating that we can't get quicker responses and a way to resolve this issue so we can pay our employees through the PR system!

Yes, having the same issue after answering the OT FLSA questions.  Can't get a hold of anyone.

Having the same issue.

Hey there, @Betsy D, @TanyaS1, @mans2331 and all other users. 

Thank you all for coming to the Community with this issue with the new No Tax on Overtime law. 

There have been a few users on other threads with the same issue and the steps below have resolved the problem. Here the instructions I have mentioned on other threads within the Community that have worked: 

1. In Single-User mode, go to Update QuickBooks (in the help menu).
2. Check "Reset Update" and click "Get Updates."
3. Once it is finished, close QuickBooks.
4. Restart (right click, "run as administrator").
5. Select Pay Employees; you will go through the Overtime setup again, click Finish.

This should do the trick. Feel free to reach back out if those steps don't work for you. Hope you all have an amazing day and holiday coming up!

Since we are on a hosted server (RightWorks), I cannot do anything with the update. Until RightWorks gets the patch from Intuit/QuickBooks, they cannot do anything about resetting the update and sending a new update.

However, I was able to log in as Admin using "Singer User" mode and run payroll without issue

If there is a known issue, they should send an email out to let everyone know that they are working on a fix.

Yes, there is a new note that pops up today (for me) and now it crashes the whole program when you are forced to answer the questions.  I cannot run my payroll that's due today because of it!!!  Unfortunately quickbooks is horrible with these types of things. 

I am having the same issue and none of these fixes are helping me to be able to do payroll