Hello everyone!!
I am posting this topic again in hopes of getting some responses! We are really looking for advice and direction.
I will start off by saying that I enter payroll for our Jail Division, which is about 100 employees at least. Our Road side has another 100 or so employees that are entered by the Jail Administration.
About a month ago, the sorting of overtime into Taxable and Non-taxable categories due to federal The Big Beautiful Bill Act was introduced to us by our HR department. They stated that this started in January of 2026 (apparently the IRS gave us grace for 2025 for this). There are a lot of intricate details that go along with the sorting of the OT. Such as, if they took vacation, comp, sick, etc. those hours do not go towards their hours worked and if they don't meet the threshold of hours for their "work period" then that OT goes into a Taxable category. If they meet the threshold for that pay period then the hours worked past the threshold go into the non-taxable category. This is extremely cumbersome to us because we have to review and exam every single employees schedule for the pay period to count hours worked v. hours used by taking vacation, comp, etc. then we have to manually split hours within their shift to try and meet the work period threshold. We are also being told that if we do not comply with this, the IRS will fine us $682 (?) per employee. If there are mistakes made, we can be fined and/or sued as well.
Are you being told by your HR department to put OT worked into two different categories, taxable and non-taxable?
Also, if you are not tasked with this cumbersome project…..is there another person doing it or your HR department?? And, the person who is doing it, how are they completing this task?
If you are not, I would like to hear about on what basis your office is making that decision.
If you have never heard of this, please let me know that too.
I'm looking for the easiest and most accurate way possible to complete this task, if it is something we are being mandated to do. And apparently it was supposed to start in January of 2026.