Alabama’s Overtime Pay Tax Exemption Ends June 30, 2025: What You Need to Know

Key Details:

Effective Period: The exemption applies to overtime pay received between October 1, 2024 and June 30, 2025.
Qualifying Overtime: Overtime compensation must be calculated in accordance with the U.S. Fair Labor Standards Act (FLSA).
Payment Timing: To qualify, overtime must be paid within the specified period. Overtime earned before June 30, 2025, but paid after this date, does not qualify for the exemption.
Employer Reporting: Employers are required to report the total amount of exempt overtime paid and the number of employees who received such pay on their monthly (Form A-6) or quarterly (Form A-1) withholding tax returns.

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