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Fix Alabama Overtime Exempt calculations in QuickBooks Desktop Payroll

If your QuickBooks Desktop isn’t on the latest release, you may need to correct your 2024 paychecks for the Alabama overtime exemption.

These corrections are critical for accurate AL Withholding tax filings.

Step 1: Update QuickBooks and run a Payroll Item Detail report

Update QuickBooks Desktop to the latest release.
Close and restart QuickBooks Desktop.
Open QuickBooks Desktop and sign in to your company file as the Primary Administrator in single-user mode.
Go to Reports, select Employees & Payroll, then Payroll Item Detail.
Select Customize Report.
From Date Range, choose Custom, then enter 1/1/24 through 1/31/24.
Select Filters.
From Current Filter Choices, select Payroll Item, then from Payroll Item, select Multiple Payroll Items.
From the Search window, enter OT. Select all items associated with OT, then select OK.
Select Multiple Payroll Items again.
Enter Overtime. Select all items associated with Overtime, then select OK twice.
From Total by, select Total by Employee, then Refresh the report.
Save or print this report.
Repeat steps 6 through 13 for each month in 2024.
Review each report. The Amount total is reported on Form A6, and should be the same amount as the Wage Base total. If the Amount and Wage Base totals are different, see below to correct your paychecks.

Select your payroll product to make the corrections.

Note: Not sure which payroll service you have? Here's how to find your payroll service.

QuickBooks Desktop Payroll Assisted

To correct the paychecks, you’ll need to create liability adjustments.

Go to Employees, then Payroll Taxes and Liabilities. Select Adjust Payroll Liabilities.
Enter the Date as the last day of the month (ex: 1/31/2024).
Select your first Employee that needs a correction.
From Item Name, select the AL - OT Withholding Exemption.
From Wage Base, enter the amount you need to adjust the wage base by.
Example: The Wage Base total for your employee on the payroll item detail report is 5000.00. The Amount total is 500.00 . The difference is -4500.00. Enter -4500.00.
Select Save.
Repeat these steps for each impacted employee AND each impacted month.
When finished, send a zero payroll to sync the changes.

QuickBooks Desktop Payroll Basic or Enhanced

Go to Employees, then select Payroll Center.
Select Transactions. Filter to Paychecks only for 2024.
Double-click the first paycheck.
Select Paycheck Detail. If the paycheck is direct deposit, contact us for help before completing the next steps.
Select Unlock Net Pay. Select OK.
Remove the hours on any of the payroll items, then re-add them. Select Save.
Select Yes on the message. Once the paycheck updates, you’ll see the wage base change.
Repeat steps 3-7 for each 2024 paycheck. Then Form A6 will show the correct number of employees subject to the AL OT exemption item and update the wages subject to AL OT for each month.

QuickBooks Desktop Payroll AssistedQuickBooks Desktop Payroll BasicQuickBooks Desktop Payroll Enhanced

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