The IRS won’t require employers to separately report tips and overtime in 2025, which may be confusing for employees. IRS guidance can help figure the deductions.

The new “no tax on tips” and “no tax on overtime” deductions require additional reporting by employers and other payers. However, rather than require more reporting this late in 2025, the IRS is ...

Traditionally, all tip income was taxable, and workers had to report any cash tips exceeding $20 per month to their employer. But in 2025, the One Big Beautiful Bill introduced temporary exemptions: ...

Deduction for overtime pay and tipped income: For tax years 2025 -2028, the OBBBA allows employees to take an above-the-line tax deduction on qualified overtime pay and qualified tips. Employer ...

Despite the simple and catchy sound-bites, the “no tax on tips” and “no tax on overtime” opportunities under the One Big Beautiful Bill Act (the “OBBBA”) have limits and require administration by both ...