Tie-Out Press

QuickBooks Qualified Overtime Tracking, for the bookkeeper closing the year

Tie-Out Press · Current as of 4 October 2026.

Box 12, code TT on the 2026 Form W-2 is the total qualified overtime compensation: the "and-a-half" portion of overtime that section 7 of the Fair Labor Standards Act requires, also included in boxes 1, 3 and 5 (2026 General Instructions for Forms W-2 and W-3; IRC §225(c)(1)). QuickBooks Payroll documents a pay item for tracking that amount in one help article, QB1, "Impact of the No Tax on Overtime provision to QuickBooks Payroll", updated 25 August 2026.

This page makes no claim about how QuickBooks behaves. Every QuickBooks statement below is QB1's text as the payroll-vendor documentation map recorded it on 24 September 2026; a help page can change after it is read.

What QB1 says the tracking item records

In QB1's words, "the “half” of the “time-and-a-half” required by the FLSA is “qualified overtime.”"

For both products, QB1 describes year-to-date corrections as an added amount on the next paycheck for an increase and edits to prior paychecks for a decrease.

What QB1 does not say

QB1 does not contain the words "Box 12", "code TT" or "2026 W-2". The companion article QB2, "Preview your W-2s" (updated 5 August 2026), names box 12 only for codes DD and FF and does not contain the word "overtime". Neither says where the tracking amount appears on the 2026 W-2. QB1 does not mention nondiscretionary bonuses, commissions or shift differentials in the qualified-overtime calculation, and its Desktop section does not mention exempt employees.

Four cases to check by hand

The arithmetic for each rule below is worked in tables on the half-time premium, worked.

Tipped employees. A tipped employee's regular rate includes the tip credit; the premium is not computed on the cash wage (29 CFR 531.60). The map quotes nothing from QB1 on the tip credit. In a Desktop file, the check is which rate sits on the payroll item above Overtime Pay for each tipped employee.

Bonus true-ups. A nondiscretionary bonus belongs in the regular rate, and a bonus paid later is apportioned back over the workweeks in which it was earned (29 CFR 778.208 and 778.209). Where actual weekly earnings cannot be determined, 778.209(b) names equal amounts per week first and equal amounts per hour second; the two give different premiums. The true-up counts in the year it is paid (FS-2026-13 Q3).

Overtime triggered by paid leave. Holiday, vacation and sick pay are not hours worked, and "no part of such payments may be credited toward overtime compensation due" (29 CFR 778.218(a)). A payroll that pays overtime after 40 paid hours pays a premium the FLSA never required whenever leave falls in the week. QB1's Desktop section assumes overtime paid is in line with FLSA standards; a week with a paid holiday tests that.

State daily overtime and double time. Only the amount minimally necessary to satisfy 29 U.S.C. §207 qualifies; excess paid under state law or a collective bargaining agreement does not, and the first non-FLSA example given is "hours beyond 8 on a workday" (FS-2026-13 Q16). Daily premiums are creditable toward weekly FLSA overtime (29 U.S.C. §207(e)(5) and (h)(2); 29 CFR 778.202). One case is a documented assumption, not settled guidance: a four-by-ten week of exactly 40 hours carries California daily premiums and, on our reading of Q12's formula, no qualified overtime. FS-2026-13 does not work that case.

What the reconciliation checks before the W-2

A reconciliation that holds up runs in this order, by workweek; it is the order the Qualified Overtime Kit is built around.

1. Eligibility. An FLSA-exempt or non-covered employee has no qualified overtime whatever was paid (FS-2026-13 Q1, Q4), and neither does an owner of 20% or more who is active in management (Q5).
2. Hours worked in each fixed 168-hour workweek, leave excluded (Q13; 29 CFR 778.218(a)).
3. The regular rate: straight-time earnings over hours, weighted across rates (29 CFR 778.115), with shift differentials (778.207(b)), nondiscretionary bonuses (778.208) and any tip credit (531.60).
4. The premium: hours over 40 × 0.5 × the regular rate (FS-2026-13 Q12), and no more than the FLSA required (Q16).
5. Pay date: each amount counts in the year it is paid (Q3).
6. The total, uncapped, even above the $12,500 deduction limit (Q10). The kit imports no payroll figure, so comparing the total with the tracking item's year-to-date, employee by employee, is the practice's step.
7. After furnishing, a code TT error is corrected on Form W-2c "as soon as possible" (Q11).

The date

Forms W-2 for 2026 are due to employees and to the Social Security Administration on 1 February 2027, because 31 January 2027 is a Sunday (2026 General Instructions for Forms W-2 and W-3).

The Qualified Overtime Kit, TY2026 edition, is an Excel workbook built to the 2026 Form W-2 instructions for reconciling box 12, code TT; the free spot check works one employee's workweek.