Compliance Stuff

The Internal Revenue Service (IRS) released guidance on November 5, 2025, granting employers relief from tax penalties for failing to provide employees information related to their (1) “qualified tips” and (2) “qualified overtime compensation” that is otherwise required under the One Big Beautiful Bill Act (OBBBA). The relief applies only to the reporting obligation for the 2025 tax year. Related Links IR- 2025-82  (IRS announces no changes to individual information returns or withholding tables for 2025 under the One, Big, Beautiful Bill Act) IR-2025-92  (Treasury, IRS issues guidance listing occupations where workers customarily and regularly receive tips under the One, Big, Beautiful Bill) IR-2025-110  (Treasury, IRS provides penalty relief for tax year 2025 for information reporting on tips and overtime under the One, Big, Beautiful Bill) IRS Notice 2025-62  (Relief from Certain Penalties Related to Information Reporting Required in Connection with No Tax on Tips...

Although the law addresses numerous policy areas at the federal level, several of its components specifically address, or will indirectly affect, economic and social dynamics within the District. Below is a detailed discussion of the major elements likely to influence local residents, businesses, and governmental entities, along with the possible implications. One prominent section relevant to the District is the modification of certain individual tax deductions relating to state and local taxes (often referred to as SALT). Under the bill, the limitation on these deductions is extended and further refined, with the changes taking effect for taxable years beginning after December 31. This can significantly affect District taxpayers who typically pay higher local taxes. As the District of Columbia functions both as a city and a quasi-state for many federal legal purposes, these tax changes will alter the after-tax disposable income of residents. This adjustment may influence real estate...

Takeaway Read our blog post to learn the essentials you need to know about the “No Tax on Overtime” provision of the recent budget reconciliation bill. This exemption retroactively begins on Jan. 1, 2025, and will remain in place through 2028. Catch up on some quick definitions and learn about reporting and compliance topics employers will need to take into account in the coming years. A budget reconciliation bill known as the “One Big Beautiful Bill” was recently signed into law. This bill contains notable provisions, including one which  eliminates federal taxes on tips . Another part of this bill eliminates the taxes paid by employees on overtime hours worked. Let’s go over some information that will help you stay informed about this legislation. What is overtime pay and how is it currently taxed? Overtime pay is the premium that employers pay employees for working longer than a standard number of hours within a specified period. For most employees, overtime is considered to be ...