Overtime premium for OBBBA compliance

With the One Big Beautiful Bill Act (OBBBA), you can deduct the overtime premium portion of certain wages for tax purposes, as outlined in Fact Sheet FS-2025-03. To support this, Accounting CS now offers an
OBBBA OT
field during payroll check data entry for you to record the Overtime Premium amount.
Overtime premium, per the OBBBA provisions, applies to non-exempt employees under the Fair Labor Standards Act (FLSA). If the employee is paid overtime at one and one-half times their regular hourly rate for hours worked beyond 40 in a workweek, the “one-half” portion of the overtime wages is considered the overtime premium.
Example
  • Regular rate: $20/hour
  • Overtime rate: $30/hour
  • Premium portion: $30 – $20 = $10/hour
  • 5 Overtime hours worked.
Enter
$50.00
(5 x $10) in the
OBBBA OT
field.
For more overtime examples, refer to IRS Notice 2025-69.

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