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Buy nowThat 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.