“No Tax on Tips and Overtime” – Compliance Guide for Financial Services Employers
H.R. 1 doesn’t eliminate tax on tips and overtime—it creates federal income tax deductions that employees claim when filing returns, while payroll withholding continues unchanged. You’ll need upgraded payroll systems by December 31, 2025, to track qualified tips (capped at $25,000) and overtime premiums separately for W-2 reporting starting in 2026. Only 68 approved occupations […]
