In Notice 2025-62, released on November 5, the IRS provided temporary relief to employers and payors for failing to comply with certain reporting requirements added to the Internal Revenue Code by the One, Big, Beautiful Bill Act (OBBBA) in conjunction with sections 224 and 225 of the Internal Revenue Code (see prior coverage). Subsequently, in Notice 2025-69, the IRS provided guidance to employees and payees as a result of the relief provided by the earlier notice to employers and payors. Under sections 224 and 225 and subject to certain limitations, employees and payees are entitled to deductions for qualified tips and qualified overtime compensation in the amount employers and payors provide on statements furnished to employees and payees. As part of that regime, the Act added new information reporting requirements that require employers and payors to report qualified tips and qualified overtime compensation to the IRS. It also requires third party settlement organizations (TPSO) whose gross payments exceed a certain threshold to report qualified tip information to the IRS.Continue Reading IRS Notices Provides Relief from Qualified Tips and Qualified Overtime Reporting Requirements and Guidance for Employees and Payees
No Tax on Overtime
Senate Reconciliation Bill Would Retain Tax Deduction for Overtime Pay, Subject to Certain Restrictions
By Blair Hotz & S. Michael Chittenden on
After being passed by the House of Representatives, this year’s reconciliation bill (H.R. 1) moved to the Senate, which passed its own version of the legislation today, July 1. The Senate bill would preserve without significant change many tax-related items from the House bill. There are several provisions, however, where the Senate bill varies from the version the passed the House earlier. The Senate-passed legislation will now head back to the House, where its fate is somewhat uncertain.
We previously covered several of the relevant tax provisions when House passed its version of the reconciliation bill. This article is part of a series of articles examining how those provisions would change under the Senate’s legislation.
As discussed in our prior post, the House bill would provide a new deduction for “qualified overtime compensation” under a new section 225 of the Code. The Senate bill preserves the deduction for qualified overtime compensation but makes some changes. To begin, the Senate bill would limit the annual deduction for qualified overtime to compensation to $12,500 ($25,000 for taxpayers filing a joint return). The House bill did not include a cap.Continue Reading Senate Reconciliation Bill Would Retain Tax Deduction for Overtime Pay, Subject to Certain Restrictions
House Reconciliation Bill Would Enact Tax Deduction for Overtime Pay
The House of Representatives continues work on a reconciliation bill that would enact significant tax provisions and spending cuts. The various legislative committees have completed work on the areas of the bill within their jurisdiction, including the Ways and Means Committee, which proposed language that would enact $3.8 trillion in tax cuts over the next ten years. Over the weekend, the House Budget Committee consolidated the legislation, and the House Bill is now before the Rules Committee, where a managers’ amendment may be considered before it heads to the House floor. This article is one of a series of articles discussing various proposals in the legislation that touch on tax withholding, reporting, and fringe benefits.
The House Bill proposes various changes to the Internal Revenue Code, including a new deduction for “qualified overtime compensation” under new section 225 of the Code. The proposal would enact one of President Trump’s campaign promises.Continue Reading House Reconciliation Bill Would Enact Tax Deduction for Overtime Pay