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Payroll tax forms

Set up pay items for the OBBBA overtime premium

Do the following to set up a payroll item to report the OBBBA overtime premium amount from payroll checks on W-2s for tax year 2026 and later:
  1. Select
    Setup
    Payroll Items
    .
  2. Verify the calculation type for the payroll item is 1 of the following:
    • Hourly rate
    • Hourly rate - Total hours
    • Salary - Hours sensitive
    note
    These are the only calculation types that support automatic calculation of the OBBBA overtime premium.
  3. Select
    Box 12 - Code
    , then
    TT - Total qualified overtime compensation; use for deduction on Sch. 1-A (Form 1040)
    .
  4. In the
    OBBBA Overtime Calculation
     section, use the
    Box 12 code TT based on
     field to specify which hours are used to calculate the OBBBA overtime premium during payroll check entry.
    Calculation option
    Hours used from payroll check
    How Accounting CS calculates the OBBBA overtime premium
    When to use this option
    None (manual entry)
    None
    Accounting CS doesn’t calculate the OBBBA overtime premium automatically. The premium amount must be entered manually.
    Use when the OBBBA overtime premium is calculated outside of Accounting CS or when a custom amount must be entered on each payroll check.
    Regular hours – OT rate preset
    Reg Hours column
    Divides the regular rate by 3, then multiplies the result by the number of hours entered in the Reg Hours column.
    Use when an overtime rate is already set on the pay item and the premium is calculated from regular hours.
    Regular hours – DT rate preset
    Reg Hours column
    Divides the regular rate by 4, then multiplies the result by the number of hours entered in the Reg Hours column.
    Use when a double‑time rate is already set on the pay item and the premium is calculated from regular hours.
    OT hours
    OT Hours column
    Divides the regular rate by 2, then multiplies the result by the number of hours entered in the OT Hours column.
    Use this option if the premium should be calculated from overtime hours only.
    DT hours
    DT Hours column
    Divides the regular rate by 2, then multiplies the result by the number of hours entered in the DT Hours column.
    Use this option if the premium should be calculated from double‑time hours only.
    OT and DT hours
    OT Hours + DT Hours columns
    Divides the regular rate by 2, then multiplies the result by the total hours entered in the OT Hours and DT Hours columns.
    Use this option if the premium should include both overtime and double‑time hours.
    note
    For new and existing pay items with
    W-2 Box 12 code TT
     selected, the default setting for the
    Box 12 code TT based on
     field is
    OT hours
    .

This article applies to:

  • Product: Accounting CS
  • State: All states
  • Subject: Payroll tax forms

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