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Overtime Tax Exemption Updates

Posted
Updated

The One Big Beautiful Bill Act allows workers to deduct up to $12,500 of overtime pay ($25,000 for joint filers) from federal taxable income for tax years 2025–2028, effectively eliminating federal tax on qualified overtime pay.

Required Action from you

  • Pay Type
    • Applicable pay types must be updated to report W2 Form Box 12 IRS Code TT. 

Key Software Updates

Accounting Master

  • W-2 Employee Listing Report updated to include new rows for overtime for non-exempt employees:
    • Location: Packages | Payroll | Reports | Processing Reports | W-2 Employee Listing
    • Displays qualified overtime wages for Box 12 TT.
  • Aatrix updated to include conversion of Box 12 TT to appropriate Box 14 OBBBA field.
Table of Contents

 

Delinquents

No Penalty Option for Delinquents

A new “No Penalty” option is now available for delinquent accounts, so users have the ability to send a late notice to an account, but keep the account from getting a penalty. An Expire Date, Alert, and reports are available for accounts flagged No Penalty.

A No Penalty check box was added to the Credit Node of the Service Order, with a corresponding Expire Date drop-down calendar. When checked, the account can receive a delinquent notice, but will not get a late fee during the Penalties process. The Expire Date can be set to limit the amount of time the account is exempt from penalties.

A No Penalty Alert is available for both Inquiry and Payments at Maintenance | Common | Alerts, and will display in the Alerts window for any accounts flagged No Penalty.

The Non-Zero Balance Report found in the report’s menu of the Delinquent process, contains a new No Penalty column to aid in identifying No Penalty accounts.

The Credit Attributes report, and the Grid Report – Account can be used to discover accounts flagged as No Penalty. The Credit Attributes report has a new group box for No Penalty Options, and the Grid Report – Account includes No Penalty, and No Penalty Expire Date selections.