The IRS created a fact sheet to describe some provisions of the One Big Beautiful Bill Act (OBBBA), which was signed into law on July 4 (Pub. L. 119-21) [FS-2025-03, 7-14-25]. The fact sheet only addresses provisions that are effective for 2025 through 2028.
Guidance to Come
In the fact sheet, the IRS said it will provide guidance for the “no tax on overtime” and “no tax on tips” provisions included in the OBBBA. Both provisions are retroactive to January 1, 2025.
Transition relief. The fact sheet states the “IRS will provide transition relief for tax year 2025 for taxpayers claiming [these] deduction[s] and for employers and payors subject to the new reporting requirements.”
Tip occupations list. Employers must file information returns and furnish statements to taxpayers showing certain cash tips received and the occupation of the tip recipient. The fact sheet states that, by October 2, the IRS must publish a list of occupations that “customarily and regularly” received tips.
PayrollOrg Resources
PayrollOrg has created a Hot Topics page on the OBBBA.
To learn how this law will affect your year-end processing and to prepare for changes in 2026, plan to attend one of PayrollOrg’s Preparing for Year-End programs this fall. This seminar provides updates on the latest changes in legislation and regulations that affect the close of 2025 and the first payroll of 2026.
Jyme Mariani, Esq., is Director of Payroll Information Resources for PayrollOrg.
