For 2025 W2, if we report Qualified OT, do we report the TOTAL OT for the year and let the employee calculate the premium portion, or do we report only the HALF time in Box 14? CPA websites are indication both ways, so this is a bit confusing. 

I appreciate you sharing this matter in the Community forum, @CMeGo.

It looks like you've posted a similar question twice. My colleague has already addressed your concerns. You can view her response through this link: https://quickbooks.intuit.com/learn-support/en-us/employees-and-payroll/re-2025-w2-qualified-ot/01/1...

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

Is QB team working on addressing the issue with the Qualified OT Comp calc that does not seem to be working correctly?

Hi, @csc21.

To further investigate the issue you're experiencing with the Qualified Overtime Calculator, I recommend contacting our live phone support team for assistance.

They will be able to provide you with the most accurate guidance and identify the best solution for resolving the issue.

Here's how you can reach out to them:

1. Click on the Help icon located in the top menu.
2. Select the Search tab and type in your concern, such as Help.
3. Click the Contact Us button, then choose between Chat or Callback to connect with our support team.

You can contact them via the Get help with QuickBooks products and services article, which also lists their support hours.

Please respond to this thread if you have additional concerns.

So the employee makes $20 an hour. Works 46 hours in the week. They have 6 hours of OT paid at $30 an hour and an additional 6 hours at $10 an hour of Qualified OT?

That's correct, the qualified OT for the deduction is only the premium portion over their regular rate, in this case the half time, that qualifies. 

Hello there, BonnieW.

Yes, overtime pay applies here because the employee worked 46 hours in a week, 6 hours over the 40-hour limit. Overtime is earned only for hours worked beyond 40 in a week.

Only the half portion of the time and a half overtime rate counts as overtime pay. For an employee earning $20 per hour, the overtime rate is $30 per hour, but only the extra $10 per hour (the half portion) is considered qualified overtime pay. So, for 6 overtime hours, $60 qualifies as overtime pay. The statement also notes 6 hours paid at $10 per hour for Qualified OT, which meets the requirements and fully qualifies.

In summary, the overtime pay qualifies because the employee worked more than 40 hours in the week, and only the half portion of the time and a half rate is considered overtime pay. For more details, refer to the provisions in the One, Big, Beautiful Bill article.

Feel free to reply below if you have further questions.

Nice Question, Its again a mistaken amounts can end up with INCORRECT tax Deductions

The Qualified PTO payroll item is in Company Contributions.  The other earnings is in your employee tab under the other payroll deductions and additions and add Qualified overtime tracking.

I ended up adding all the rates to the employee files other additions and deductions line as will then i just pop in the overtime hours and the calculations have been correct.  Prior to this I updated both the Quickbooks and the payroll prior trying to get the formula to calculate correctly and the calculation was still off by usually just a couple $$$.  Until it's corrected, I moved on as well.

To everyone out there is still trying to get it to work this is a quick solution you still some manual entry, but it simplifies the issue in the meantime.  

I changed the liability and expense account to my payroll wages expense account and then it is a credit and debit to wages so nets out and doesn't show as a liability at all.

Hi there, @NRieck. We appreciate you joining the thread.

To ensure you have the correct guidance for accounting for the new Qualified Overtime Compensation under the Working Families Tax Cut Act, I recommend contacting our QuickBooks Live Support team directly.
 

They have the resources to provide the most accurate guidance and identify the best solution for this concern.

Here’s how:

1. Navigate to Help in the top menu.
2. Proceed to QuickBooks Desktop Help/Contact Us.
3. Click Contact Us, type your concern, and then tap Continue.
4. Choose Chat or Callback to connect with our support team.

You can check our support hours and pick a convenient time to connect in this article: Get help with QuickBooks products and services.

If you have any other questions, we’re here to assist you.

Clear as mud.

So they get paid twice for their overtime now? At time and a half. And then another half portion?

Mine doesn't show a "miscellaneous" option?  Also, I assume I can get this to work manually as paid time off counts toward overtime, extra work on the payroll side of things.  Which I realize that the QOT is only calculated on OT hours that are actually worked time.  Makes it harder to do this, currently I have an excel spreadsheet set up to calculate the 1/3 for OT and 1/4 for double time, then I manually put in the total from both of them for the QOT amount when entering payroll.  But I am wondering if I set it up as you explained that I can get it to calc for me, instead of using my spreadsheet?

no not paid twice. you still do the overtime like usual but the Qualified OT tracking is just to track the amount that the employee can claim when they file their 1040 - so it is only for tracking and only to be reported on their w2. no other reporting. employer still pays taxes on it and they can claim deduction on their taxes when they file.

how it automatically came up on my QB was to go to liability account and it is not a liability. so i changed the liabiliy to wages expense and left expense as wages expense so it nets itself out. i ran it passed our CPA and he said that should be fine. 

This is my question, too. I have been entering the the overtime rate (rate) and the number of overtime hours (quantity) under "Other Payroll Items" tab for the line item "Qualified OT Tracking."   Should the rate actually be the employee's overtime rate or the difference between their standard hourly wage and the overtime wage?  For example, Employee is paid $10 per hour standard rate and $15 per hour overtime rate.  He works 5 hours overtime in the pay period.  Do I enter  5 hours at $15 (regular overtime rate) or 5 hours at $5 (the difference between the standard and overtime rate)?

I've noticed that our QOT is not tracking correctly.  If the employee worked at the same job all week and only had two lines on the "enter time" screen one for Regular time and one for overtime, its working fine.  If time is split by job daily\weekly in any way, it's absolutely wrong. I have employees with 76 hours in a week and zero QOT tracking. Figure that?

Looks like I have to look at each paycheck, then add any hours over 40 to the QOT tracking box.  Except PTO, travel time, etc..

Or I may run an OT weekly quantity report at the end of the year and calculate each weeks QOT per employee.  Then add that to the QOT tracking box on the last paycheck of the year, per employee...

If my logic is flawed someone, please let me know.  Seems simple enough to me I don't know why QB can't handle it.

i am hoping at some point this is a fix for Quickbooks but i have done a lot of digging and it seems for now it is a manual entry into the Qualified OT tracking item from everything i have seen 

Hi Centerville, thank you for reaching out about entering overtime rates. I understand how important it is to make sure whether to enter the full overtime rate or just the difference for the 'Qualified OT Tracking' section. I'm happy to clarify this process for you.

For "Qualified OT Tracking", always enter the full overtime rate, not just the difference between standard and overtime rates.

In your example, enter 5 hours at $15 (the full overtime rate) under the "Other Payroll Items" tab for "Qualified OT Tracking". This means inputting 5 hours and $15 per hour as the rate. Do not enter 5 hours at $5 (the difference), as this would lead to incorrect calculations.

Here's a breakdown of the calculation:

• Regular pay (40-hour work week): 40 hours * $10 = $400
• Overtime pay: 5 hours * $15 = $75
• Total pay: $400 + $75 = $475

For more information on correct OT Tracking calculations, please refer to this article: Impact of the No Tax on Overtime provision to QuickBooks Payroll.

Regarding the Brandon2023 case, if "Qualified OT Tracking" doesn't auto-calculate, you can fix it manually. For manual entry, open the Paycheck Detail screen for each payroll run and enter the OT info in individual paycheck details.

For NRieck's situation, we're working on a solution. In the meantime, we can perform a single adjustment to correct the Year-to-Date (YTD) amount, eliminating the need for corrections every pay period.

If you need assistance reviewing past entries or have further questions about overtime calculations in QuickBooks Desktop Payroll, please don't hesitate to ask. We're here to ensure your payroll remains accurate and compliant.

I agree with you Brandon. Thank you for the heads up. I just inputted a "Jane Doe" time sheet with multiple jobs and paylines and the qualified overtime tracking did not work. As we are a company that works at multiple projects in one week, as well as in a single day sometimes and we cost/track our payroll to a job/project this will be an issue for us as well. I will either keep track on a weekly basis or at the end of year.

The nice part would be for QB to fix their program to be able to track the qualified OT from multiple lines / multiple OT amounts, so all we would need to do is check the qualified OT calculation quickly when we are verifying each paycheck and be done with it. (and possibly do another quick check at the end of the month/quarter/year to verify amounts.)

Those of us that use multiple payroll amounts and line items. I was able to get the Qualified OT Tracking to work for multiple rates of pay and multiple projects/jobs.

Choose Employee -then- Select Employee -then- payroll info -then-

Additions, Deductions and Company Contributions- type in Qualified OT Tracking - enter- the $ amount for the Qualified OT Tracking amounts. One line for the standard overtime rate and another line for the Prevailing Wage Rate or (another OT rate you need) You can use multiple lines here. Save the information you entered.

Then go to pay employees - select your employee and open up the screen and you should have - multiple lines of the Qualified OT Tracking with the Rates showing from the employee screen. Now you just need to enter the quantity which is the hours that the employee worked. The company summary will populate accordingly. 

Yes , i have faced that too, In my Scenario an employee had 35 hrs OT, the QB Desktop does not calculate correctly for higher amount of OT hours

Hi there, jitu1049.
 

I understand your being concerned that it's not calculating correctly. QuickBooks Desktop calculates Qualified Overtime tracking based on the pay type set up in the Qualified Payroll Item. Overtime is calculated according to the default setup, which applies either a 1.5x or 2.0 multiplier to the regular pay rate.
 

Here is an example of how QuickBooks calculates Qualified Overtime:
 

• Employee worked: 35 overtime hours
• Regular pay: $20/hour
•  Time-and-a-half hourly pay: $20 × 1.5 = $30/hour
• Calculation: Multiply the pay rate ($30/hour) by the number of hours (35): 35 × $30 = $1,050, employee earns a total of $1,050 for working 35 overtime hours at time-and-a-half. 
 

If your payroll item is set up correctly and you're using the default Overtime setup (either 1.5x or 2.0x), the system should provide accurate results regardless of the number of overtime hours worked.
 

Please update your tax table to the latest version, as this provides up-to-date, accurate rates and calculations for federal and supported state taxes, payroll tax forms, and e-file and e-pay options.

If you did and the system still calculating it differently, I recommend contacting our Payroll Live Support team. They have advanced tools to investigate the issue and can help resolve it.

Please leave us a response if you have other questions or concerns