How do I enter my overtime hours that are exempt from Alabama state income tax?

To report exempt overtime on your Alabama tax return using TurboTax, follow these steps:

1. Enter W-2 Information: When you input your W-2 details, make sure to include the exempt overtime wages in Box 14 as indicated on your W-2 form. Use the description "EX OT WAGES" (e.g., EX OT WAGES - $15,250).
2. Verify Box 16: Ensure that the exempt overtime wages are not included in Box 16 (State Wages). If they are, you may need to contact your employer for a corrected W-2.

If your exempt overtime income is excluded from Box 16 (State Wages) on your W-2, TurboTax won't include it in your Alabama taxable income. This ensures that the exempt overtime wages are properly excluded from your state tax calculations.

For additional details see Alabama Department of Revenue's Overtime Exemption page