New Qualified Overtime Compensation Tracking Not Working

Hi there, mrsd333.

Thank you for sharing your concern about the qualified overtime tracking feature. I understand the importance of ensuring your payroll processes run smoothly, especially when working with advanced tracking setups.

Since this issue involves the new qualified overtime feature and ties to recent updates or investigations around payroll tracking changes, I recommend reaching out to the live support team again to check for any updates related to your case.

To follow up with live support, here's how:

1. Open QuickBooks Desktop.
2. Select Help at the top.
3. Click Contact Us.
4. Enter the concern "qualified overtime tracking update," then click Continue.
5. Choose Start a Message or Request Callback to connect with a support specialist.

When you reach out, provide the details of your previous case and mention that you've already enabled the tracking feature for qualified overtime. The live support team will be able to review your setup and share the latest guidance based on any recent updates.

Please feel free to leave us a response if you have another questions or concerns.

I am under contractor 24 desktop as well.  Assuming you have to overtime fields one that is tracking as Labor cost of goods sold and one that is overhead, correct?  I believe this is our delima.  Quickbooks automatically set up Qualified OT Tracking as a company contribution, not has other wages as stated it should have been set up.  I also spent hours on the phone with tech support with no resolution.  Did you run the tool hub?   Plus I believe in some way that tracking has to track back to the two overtime items that are set up in qb.   Have you come to a resolution 

We are trade subcontractors and we use timesheets for our employees.  I read somewhere that we need to use the overtime (x1.5) payroll item and double time payroll item that were created by QB and not our own manually created overtime payroll items.  I made sure for 2026 to use only the QB created overtime payroll items.

When I create paychecks using the timesheets, I get paychecks with the item "Qualified OT Tracking" in the "Other Payroll Items" box as well as in the "Company Summary" box.  However; even when there is qualified overtime on the paycheck, there is no tracking numbers for these line items.  I have to compute this number myself.

I will contact tech help again today. 

Also, we are using the Right Networks cloud to access QB.  In the past, fixes have been slower and I was told that Right Networks holds the program and has to make fixes themselves.  Not sure of the validity of this.  Right Networks is saying this is not their issue.  

Payroll List: Qualified OT Tracking/Company Contribution

Liability (Payroll Liability)

Expense:  Payroll Expense Wages

Tax tracking type:  Qualified Overtime Tracking

Taxes (none)

Calculate this item based on hours

Rate: 1.5

Limit (none)

I just got off the phone from a long session with QB tech support.  The end result was I was told that QB has not fixed qualified overtime tracking yet.  It is a known issue and many people are calling in about it.  They had no time frame for when it would be fixed.  For now we must manually determine and enter qualified overtime compensation on each paycheck for each employee.

I have it solved. 

The last update added 

Hi, 

The payroll update added payroll item Qualified OT Tracking as a Company Contribution. 

Edit payroll item

Liability account: Payroll Liabilities (should be there)

Expense account: Payroll Expenses: Wages (however you have it set up) 

Tax Tracking: Qualified Overtime Tracking (should be there from the update)

Taxes: Leave Blank

Calculate this item based on hours (obviously do not include sick and vacation as those do not create overtime) 

Rate is 1.5

Limit (none) 

In each employee file under payroll add Qualified OT Tracking to the additions and deductions column.

When you creating checks in that box it will the total hours 48

Below in company contribution is will calculate the amount based 8 hours of OT..If you are biweekly by 80 hours so forth and so on. 

I agree with you "we need to use the overtime (x1.5) payroll item and double time payroll item that were created by QB and not our own manually created overtime payroll items."  I am having the same issues. The number is populating for the "Other Payroll Items Qualified OT Tracking"  but it is not caluculating and  for the "Company Summary - Qualified OT Tracking."  I have to compute this number myself. We are a trade subcontractor also this needs to be fixed because as the season progresses we don't have time to keep track of this also.

I use the weekly time sheets for my payroll reporting. I'm a California Employer and pay overtime over 8 hrs

In a scenario where say Mon 10 hrs Tues 6 Wed 7 Thurs 11 fri 8 Total of 42 hrs 37 hrs which I would have paid regular rate and 5 hrs overtime. But if its based on 40 hrs will only the 2 hrs qualify?

I set my payroll up 

Company Contribution

Agency (Blank)

Liability Payroll Liabilities

expense Payroll Liabilities 

Tax Tracking Qualified Overtime Tracking

Taxes (Blank)

Calculate (Based on Quantity - enter manually on paychecks)

Rate 1.5%

Annual Restart each year

When I edit the payroll item "Qualified OT Tracking" to read "calculate this item based on hours" then next screen if I use 1.5 as the rate as you suggest, QB comes up with an amount far too great on the paycheck for Qualified OT Tracking in Other Payroll Items.  And it still does not track on the check under Company Summary for amount and YTD.

Frustrating, still no solution and the tech people are still struggling to know what to try.

I found out by trial and error that new payroll item needs to be set-up. For both regular pay and overtime pay in order for the qualified tracking to work.  The old payroll items will not track or compute for the New Qualified Overtime Compensation Tracking items. 

Under the payroll item list tab I selected new  and set-up new payroll items, I also used the EZ setup method and selected the hourly wage and overtime compensation assigned a name (ex. Regular Pay) to show on the paycheck and selected the next box as yes we have hrly employees work Overtime at time & half - then assigned a name (ex Overtime (x1.5) hrly) to be written on each check and said no to double time. and then finish. The qb program will compute and bring you back to the Payroll Item List.  Now you will need to go to each employee and enter in the new payroll pay items with the new names you just assigned. Employee #1 Regular Pay, Overtime (x1.5) hrly - once you star typing these names will start to show for you to select. Then enter employees time into the weekly time sheet worksheet and select your new payroll items. This is the only way the QB program will track the new qualified overtime compensation tracking items.

We are a trade contractor also.  I found out by trial and error that the QB payroll program is unable to add more than one overtime into the New Qualified Overtime Compensation Tracking. The QB payroll program will not compute any number for the New Qualified Overtime Compensation Tracking lines. The new payroll line items will work as: Reg Pay with Overtime pay and the QB program will track the  New Qualified Overtime Compensation Tracking lines correctly. But if I add Reg pay with Overtime Pay and then have payroll line items of Rate Pay Laborer and Overtime Pay Laborer to my base pay it will not compute anything for the New Qualified Overtime Compensation Tracking lines. If I do the Rate Pay Laborer and Overtime Pay Laborer in a different paycheck or time sheet from the Regular Pay and overtime Pay line items the Rate Pay Laborer and Overtime Pay Laborer will track correctly in the New Qualified Overtime Compensation Tracking lines. The program can only look at one overtime number at a time. This needs to be fixed. 

I am having the same issue.  When I ask QB's to track the hours, it auto fills in the total hours for the week and not just the OT portion in the "qualified OT tracking" in other Payroll Items.

Hi, ds5001ds.
 

I understand how this new tracking update can be confusing. Let me clarify it for you.

When the payroll wizard appears and you select "Yes", QuickBooks is designed to automatically calculate Qualified Overtime (OT) Tracking based on the overtime hours entered and the payroll item setup. However, if you select "No", the Qualified OT Tracking will not be calculated in the "Other Payroll Item" section, even if the payroll item is already set up and the option to reinstate this preference in the wizard will be available in a future.

Another one is, if you're using pay types other than the default Overtime 1.5x or 2.0 payroll item, the Qualified Overtime Tracking item will not also automatically calculate in the Other Payroll Item setup, even if you selected "Yes" in the wizard.

These factors are the reasons QuickBooks may autofill only the total hours for the week instead of also calculating the OT portion in the 'Qualified OT Tracking' field.

Because of these, you’ll need to manually calculate the correct Qualified OT Tracking amount based on the Fair Labor Standards Act (FLSA) guidelines and enter it directly into each paycheck. If you prefer, you can also input the total Qualified OT Tracking amount as a lump sum for the year on the employee's final paycheck.

You can explore these articles to learn more about the details of Qualified Overtime Tracking:

• Impact of the No Tax on Tips provision
• Impact of the No Tax on Overtime provision 
  
  

You may also read Spencer's answer here on this thread, his explanation of these issue is accurate.

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

MichaelaS,

Your reply has nothing to do with the issues we are having with tracking qualified overtime pay for 2026.  

First of all QB does separate the earning between Regular, Overtime, etc. in the Earnings column of the paycheck.

The problem we are having is that QB as of 2026 is supposed to be tracking the Qualified OT when applicable, this will go on the employees W2 and needs to be accurate.  QB has added an item to paychecks in the "Other Payroll Items" column and also in the "Company Summary" column.  This payroll item that QB has added is called "Qualified OT Tracking".

QB has said they would track this and it is not being done accurately.  Multiple persons with tech help have verified that it is not working for many people.  When it does put a number on the paycheck, it is wrong.  QB has given a formula for what the correct number should be.  IRS has guidance for what this number should be.  QB is not tracking it correctly.

11am on 1/9/26, I just spoke to tech help again and was told this issue with Qualified Overtime Tracking has not been fixed yet, it is widespread.  The back end team is working on a solution.  As of now, the numbers that QB are filling in are incorrect.  She told be how they should be filled in manually.

On the Review/Edit paycheck window, under "Other Payroll Items" for Qualified OT Tracking, the Rate should be the dollar amount that is the overtime portion.  For example if an employee gets $20/hr regular and $30/hr overtime, this dollar amount under Rate would be 10.  To the right of that for Quantity, you enter how many hours were overtime.  For example, an employee might have had 5 overtime hours, this is where 5 goes.

If you do that, the "Qualified OT Tracking" in the "Company Summary" box should auto-fill correctly.  In the example above 50 would auto-fill for amount in the Company Summary. From example above this is $50 ($10 x 5).  This is working for me.

No estimate on when the fix will come.

Do you still have to manually input the OT hours in the Qualified OT Tracking line for each paycheck?  I've added all new payroll items as you noted and still cannot get it to automatically list the Qualified OT hours.  I have to add the half-time rate to the employee setup and then manually input the OT hours on each check.    

We have the same set up and same issue.  That field populated correctly on one person.  I thought maybe it was the payroll item set up, but others with the same payroll item are not populating either.  Please advise.  Should I be manually entering this when not populated or will a future fix apply it retroactively?  

Hello there, juswal.

To make sure the New Qualified Overtime Compensation is set up correctly, please contact our Live Support team. They can review your payroll setup in a secure remote session and walk you through the process.

Here's how:

1. In QuickBooks Desktop, go to the Help menu and select QuickBooks Desktop Help.
2. In the Help window, click the Contact Us link at the bottom.
3. Enter a brief description of your concern and click Continue.
4. Click Start a Message or Request a callback to connect with an agent.

Also, make sure QuickBooks Desktop and your payroll tax table are up to date so you have the latest rates and calculations.

Feel free to return here if you have additional questions. We'll help you promptly.

I was having similar issues with getting the qualified overtime tracking to work properly. We have used the payroll service for a long time and apparently whenever our payroll items were originally set up my overtime item was not using the automatically calculation at 1.5 times regular pay. I went to payroll item list and looked at the details of how each item was set up to figure this part out.  I have always just entered the correct pay amount on overtime when setting up a new employee. I created a new overtime payroll item and disabled the other overtime item i had been using. It took some time to go through each employee and change all of the info from the old overtime item to the new overtime item, but after doing this Qb is now calculating the qualified overtime. On the payroll processing screen it shows up under "other items". The Rate is .5 times the regular hourly rate (it auto calculated this per each employee) and the quantity is showing the overtime hours only. However, on the employees paystub it shows just the overall amount calculated. For example if he had 10 hours at $5.00 per hour in qualified overtime it shows total $50.00. It does not show the breakdown of where that total came from on the paystub which may cause some questions from employees. But it seems to be working correctly after making these changes to my system. I just tried different things using a test employee set up. QB help line couldn't answer any of my questions when I talked to someone yesterday.

Having the issue with this too.  One of the employee's payroll automatically tracked the qualified OT correctly, and the other did not.  The other one that did not get tracked showed the 50% OT portion of the rate, but the time applicable was not reflected on the tracking.

Thanks for sharing the details of your concern, Ek99. In QuickBooks, overtime is tracked based on how hours are entered into the system.

To address the overtime tracking issue for one of your employees, kindly execute the troubleshooting steps below:  

• For manually entered overtime, navigate to the Paycheck Detail screen and select the paycheck for the specific employee. This will prompt the system to recalculate and update the tracking.

• For imported hours from timesheets, navigate to the Paycheck Detail screen and temporarily increase the overtime (OT) amount by $1. Save the change, and then revert it to the correct value. This adjustment should refresh the system’s tracking.

Feel free to reach out here if you have any additional questions!

Same problem here.  Right Networks to access QBE.  Will not calculate.

Hi there, @BENTTICPA.

To fix the issue of your Qualified OT amount not calculating, I recommend updating your tax table. Here's how:

1. Go to Employees, then select Get Payroll updates. 
   - To know what version you have, check the number next to You are using tax table version. 
   - To determine if it's the correct version, see the latest payroll news and updates. 
   - Select Payroll Update Info to find more details on your tax table.
2. Choose Download Entire Update.
3. Select Update, and an informational window appears when the download is complete.

Then, update your QuickBooks Desktop (QBDT) to the latest release to align with the changes of the payroll version. 

If the issue persists, I recommend contacting the QBDT Payroll Team to check your account in a safe environment. They can help locate the root cause of the error and find ways to resolve it.

Let me know if you have additional questions. We'll assist you promptly.