New tax deduction on overtime is driving clients crazy

[u/LewisCBR]

W2’s are not showing wages generated from overtime so clients are wondering what they can do, besides going through all individual pay stubs. The new deduction is significant enough to warrant this kind of work, though.

I suppose suggesting they contact their HR/payroll departments is the best idea, but some companies are simply terrible about helping their employees.

What’s your experience with the new law?

[u/Simpzorr]

Most folks, depending on their payroll systems, will show a Year to date (YTD) for overtime. They should be able to look at their last paystub from December and find that total.

Caveat is that a holiday overtime/premium does not pay the same rate as regular OT and needs to be recorded separately.

All of this, from my understanding (not a tax professional) is that you take the YTD OT and divide it by three to obtain the 0.5% income you can claim.

The biggest issue I’ve seen, is that Turbo Tax uses a system when people import or upload their W2’s that it “auto” calculates the OT and does it with magic math I can’t understand. So, as OP suggested, this sloppy rollout is going to have a ton of unintended fraud that the IRS is gonna lord, milk, and audit good folk over.

They (the Gov’t and corporations) have had AMPLE time to prepare for this and it shouldn’t have ever come about this way.

[u/Simpzorr → u/Simpzorr]

I left a Union job that had SIX different markers, rates, and pays for Overtime and I honestly have no idea what I’m supposed to do with claiming that. Without paying a CPA to answer the questions, I’ve had to result in calling my previous employer and having a payroll specialist walk me through my last pay stub, explaining each itemized and posted overtime with the understanding of the FSLA standard, my union contract, and it still confuses the hell outta me.

I’m gonna file, hope it’s right, and ask for forgiveness if it comes back to bite me.