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Keystone added two fields on the Earnings Code Maintenance screen to handle QOTC W-2 reporting, as required under the 2025 overtime deduction law.
NOTE: These fields do not impact gross or net pay, nor payroll calculations. They are used only to identify QOTC for W-2 reporting.
Earning Code Maintenance - new fields
Location: Earnings Code Maintenance screen (KE0038). From the Earnings Code Maintenance screen, click the "More..." button to access the W-2 Overtime Deduction and the W-2 Overtime Factor fields (sub-screen KE1020).
W-2 Overtime Deduction Field
Purpose: Controls if and how overtime earnings for a specific earning code are included in W-2 overtime processing.
NOTE: A blank value is treated the same as a "No". The earnings are excluded from W-2 overtime processing.
Available Selections:
- No - Earnings for this code are excluded from W-2 overtime processing. No qualified overtime compensation is generated.
- Yes - Standard Factor - Earnings are included in W-2 overtime processing. The system calculates the qualified overtime compensation using the earning code standard factor (.5 portion of 1.5). This can also be used for double time since the overtime compensation can be caluclated using the same standard factor (.5 portion of 2.0).
- Yes - Overtime Factor - Earnings are included in W-2 overtime processing. This option is used when the overtime premium is not the standard 0.5 factor. This selection requires a valid W-2 Overtime Factor. The system calculates the qualified overtime compensation using the earning code's specific W-2 overtime factor.
- Yes - No Calculation - Earnings are included in W-2 overtime processing. No system calculation is performed. This option assumes the .5 portion of overtime is already included in the calculation of this earning code. The system uses the exact amount stored in check history for this earning code as the qualified overtime compensation.
W-2 Overtime Factor
Purpose: When "Yes - Overtime Factor" is selected, the system uses this factor to calculate the qualified overtime compensation.
NOTE: The W-2 Overtime Factor is only applicable when "Yes - Overtime Factor" is selected. It is inactive for all other selections, including when it is blank.