This is a reminder that Alabama’s temporary overtime exemption for non-exempt employees will end on June 30, 2025.  Beginning July 1, all overtime pay for non-exempt employees will once again be subject to Alabama state income tax.

Here’s the link to the AL Department of Revenue announcement.

Intuit, the company behind QuickBooks, has been working to ensure its software reflects this change and provides accurate tax calculations for employers.

For those using QuickBooks Desktop Payroll:  Intuit has made a payroll update available that will start calculating Alabama withholding tax on the overtime payroll items after July 1st.  Employers MUST complete the payroll update and ensure you are using tax table version 22512 after that date.  Navigate to Employees > Get Payroll Updates to verify the tax table being used.

For those using QuickBooks Online Payroll: Please do not use the “Add Exempt Pay” feature for any overtime worked on or after July 1st.

If you have any questions, please feel free to reach out at (205) 345-8440 or email us at jmfclientservices@jmf.com.