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kgd5829
February 2, 2024
Question

Alabama Overtime totals on A6 are wrong - desktop

  • February 2, 2024
  • 1 reply
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I am seeing an issue reported in other posts of ALL wages showing as "Total amount of exempt overtime wages paid" on the Alabama A-6 Monthly Income Tax Withheld form (also the field "Number of employees with exempt overtime wages" is equal to our total number of employees, actual number of employees with OT was only 1!).

 

I followed the instructions to the best of my interpretation on setting up the AL - OT Withholding Exemption payroll item, which omit a lot of details by stating "The Add Item Wizard will launch and take you through setting up the..." item, not specifying what selections to choose during the wizard setup. 

 

Now I'm noticing other forum posts indicating it doesn't work unless you have overtime pay items that were set up with the "EZSetup method" versus Custom.  We've been running QB Payroll for 10 years, and it's possible/plausible the items were initially setup with the Custom method; I'm finding the indications Payroll for the last month maybe was figured incorrectly because of an issue raised in an obscure forum response?

 

Another user response stated running the Payroll Item Detail report should show the correct amounts for the AL - OT Withholding Exemption item; in my case, it shows $0.00 for each line amount and Wage Base as the total gross pay for that employee.  Based on this information, it seems something is not set up correctly either in my payroll items or the Quickbooks calculation methods.

 

If there is a way to fix this, I need to know it immediately so my monthly state tax withholding report will be accurate, and I needs detailed steps published on how to make the corrections retroactively on posted data.

    1 reply

    BigRedConsulting
    BigRedConsulting
    February 8, 2024

    I mocked this up in a test file a couple of days ago and everything worked as expected. I just double-checked and it's still working in my file.

     

    RE: I am seeing an issue reported in other posts of ALL wages showing as "Total amount of exempt overtime wages paid" on the Alabama A-6 Monthly Income Tax Withheld form (also the field "Number of employees with exempt overtime wages" is equal to our total number of employees, actual number of employees with OT was only 1!).

    RE: the Payroll Item Detail report should show the correct amounts for the AL - OT Withholding Exemption item; in my case, it shows $0.00 for each line amount and Wage Base as the total gross pay for that employee.

     

    Yes, the AL - OT Withholding Exception item should have a 0.00 amount and the wage base should be the same as the overtime pay amount. It's that wage base that drives the numbers on the AL A-6 form.

     

    That you're seeing all of the wages as the wage base that suggests that all of the earnings use an overtime pay item, even if you didn't intend that. It would also explain why all of your employees appear in the number of employees box on the form. If you edit the 'regular' pay earnings item or items from the payroll item list - the item that you use for non-overtime, does "(Hourly Wage: Overtime)" appear in the title of the Edit window? If so, then it's actually an overtime item and is the source of what you're seeing.

     

    RE: Now I'm noticing other forum posts indicating it doesn't work unless you have overtime pay items that were set up with the "EZSetup method" versus Custom. 

     

    I tested this to be sure, and that is not accurate.

     

    RE: If there is a way to fix this, I need to know it immediately so my monthly state tax withholding report will be accurate,

     

    If you find that one or more of your Hourly items that you use for regular pay are really overtime items (see above) then - because you cannot change the earnings type on an existing item - the way to fix this is to create a new earnings item and then merge the old one into the new one.

     

    For example, assume you have an item called "Hourly Pay" and it is actually an overtime item.

    1. Create a new hourly item and select regular pay as the type (the default). Perhaps name it "Hourly Pay 2" - but it doesn't really matter.

    2. Edit the Hourly Pay item and rename it Hourly Pay 2 and start to save it.

    3. When prompted, answer Yes that you want to merge the items.

    4. (Optionally) Edit the Hourly Pay 2 item and rename it to the original name, Hourly Pay.

     

    After doing this, the AL - OT Withholding Exception item will have the correct wage base on new paychecks, but it will still be wrong on existing paychecks. To fix that, edit each check and make a minor change, such as changing the OT hours worked, and then change it right back. This will cause the check to recalculate, including the AL - OT Withholding Exception item wage base. Double-check to make sure the net pay stays the same.

     

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