Question

Need new overtime report to give employees to support new tax bill

Forum|Forum|9 months ago
September 25, 2025
2 replies
16 views

Will QB give us a report that we can give client's employees to show the amount of untaxed overtime to support the new tax bill?

We know the W2 won't change until 2026, and we know we won't be submitting this to the IRS. However I believe QB should create something we can give to each employee. I can do it on Excel, but this would be appreciated.

QuickBooks Desktop Payroll

C

continea

Level 5

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I appreciate you, and thanks for this gem! Have a good one!

BigRedConsulting

Level 15

The employee's pay stub shows their YTD overtime, so the last pay stub will show their overtime for the year.

It doesn't seem like anything else is needed?

J

jeancarAuthor

That would be way too easy. The tax-free amount is the "and a half." Example for one pay check:

Regular wage = $10/hr, OT wage = $15/hr. You work 40 reg hours and 10 OT hours.

Your gross wages are ($10*40 hours) + ($15*10 hours) = $400 + $150 = $550.

The taxable wage is ($10*50 hours) = $500

The tax-free wage is ($15 OT rate - $10 reg rate) * 10 OT hours = $5*10 hours = $50.

The 2025 W2 will not be changing, showing only Gross wages, etc. The 2026 W2 will be different. No existing QB PR report will show this. I believe as accountants we need to help our clients support their employees and tell them what the tax-free number is. Naturally I realize there is NO feedback to the IRS on the actual amount, so the employees can put in whatever they like. There is a new 1040 form Schedule 1-A to handle these new situations, including the tips. I had planned on throwing this all into Excel and churning out a letter for each employee saying something like "You worked 400 hours of OT in 2025, resulting in $6000 of overtime wages. According to the new tax rules, $2000 of this is tax-free. Please contact your tax professional on how to use this information to comply with the new laws." I'd put it in with the W2.

The problem is we all need to do that. I would like QB PR to create a report and letter for us.

BigRedConsulting

Level 15

Using your example, the employee's last pay stub for the year will have a line item on it for Overtime and the YTD column will show $6,000. True, it won't tell the employee to divide by 3 to get $2,000, but that seems like a small step.

Even so, you can create a report in QuickBooks with the total overtime per employee and then send it to excel as you suggest.

To do this, start with the Employee Earnings Summary report. Then filter it for the payroll item or items that are overtime, and you'll get a report like this:

Then send it to Excel and add a column that calculates the Qualified Overtime with a formula:

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