Scenario 1: You use the Overtime and Double time hour types already set up by the software.
If you are using the software's Overtime and Double Time hour types and have not set up a custom hour type to handle Overtime or Double Time the hour types will automatically have the correct reporting for the One Big Beautiful Bill Act W-2 required reporting.
Enter the employee’s FLSA overtime hours on the FLSA Overtime Designation page (Step 1A) each time you run payroll.
Scenario 2: You have set up your own Overtime and Double Time hour types.
Only FLSA overtime (hours over 40 in a workweek) belongs in Box 12, code TT. To make sure every FLSA overtime hour you paid reports in Box 12 code TT, do the following.
If you have set up a custom hour type to record overtime, you will need to indicate these hours paid are counted toward FLSA overtime in their settings or when running payroll:
How to update a custom overtime hour type to Qualified OT in Settings
Go to Settings > Payroll Settings > Hours & Money Types.
Click the name of the custom hour type you use to pay overtime. The Edit Hour Type page opens.
Check the Include as Qualified OT to add FLSA OT hours box, found below the Rate Multiplier field.
Click Save.
How to update a custom overtime hour type to Qualified OT while running payroll
If your company has a custom overtime hour type you haven’t designated yet, Patriot shows this prompt after you click Next on Step 1 of payroll: “Indicate whether the following hour type is used for Fair Labor Standards Act (FLSA) overtime wages.”
For each custom hour type listed, select Use as FLSA OT or Not used as FLSA OT.
To answer for every listed hour type at once, click Use as FLSA OT or Not used as FLSA OT next to Set all.
Answering in Settings or in the payroll prompt updates the other place instantly.
Things to know before you set a custom hour type as Qualified OT
Only custom hour types with a Rate Multiplier of 1.5 or higher can be set as Qualified OT.
Once a custom hour type is set as Qualified OT, its Rate Multiplier is locked and can’t be changed.
Choose Not used as FLSA OT for custom hour types that pay overtime only because of state rules (such as daily overtime in Alaska, California, Colorado, or Nevada) or company policy.
To remove the Qualified OT setting, go to Settings > Payroll Settings > Hours & Money Types, click the custom hour type, uncheck Include as Qualified OT to add FLSA OT hours, and confirm the warning message.
Does the Qualified OT setting apply to overtime I already paid?
Yes. When you set a custom overtime hour type to Qualified OT, Patriot back fills Box 12, code TT on the 2026 Form W-2. It includes the overtime premium for every hour paid with that custom hour type, including payrolls you ran earlier in 2026 before you changed the setting. You don’t need to adjust or rerun past payrolls.