Bug Report: Schedule 1-A Validation Error (Pre-Tax Distortion)
Issue: The e-file validation script for the Section 225 Overtime Deduction (Schedule 1-A) is triggering a false-positive "Reasonableness" error by incorrectly using W-2 Box 1 as the denominator for its calculations instead of W-2 Box 3.
I spent nearly 2 hours on the phone today with technical support. I am not 100% confident this bug is being followed up on. My Diagnostic Token is: [removed]-96664364
Technical Details:
The Conflict: The software assumes a "Qualified Overtime Premium" cannot exceed 1/3 of total wages. My entry is exactly 1/3 of my Gross Wages (Box 3), but it appears as 46% of my Taxable Wages (Box 1).
The Root Cause: The validation logic fails to account for Box 12 pre-tax contributions (e.g., 403b/401k). These contributions "shrink" Box 1, creating a mathematical distortion that falsely flags a perfectly legal 1.5x overtime premium ratio.
The Impact: This error prevents e-filing for employees whose overtime work is significant and whose pre-tax retirement contributions are high, even when the data matches the W-2 perfectly.
Steps to Reproduce:
Enter a W-2 where 100% of the work is overtime (common for dual-role employees under the same EIN).
Include a significant pre-tax contribution in Box 12.
Attempt to claim the 33.3% overtime premium deduction on Schedule 1-A.
The software will block e-filing, citing that the overtime cannot be more than 1/3 of Box 1.
Thanks!
