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OBBB and the Tax Deductions on Overtime.

Debra Wittrock
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Will the overtime hours display on the W-2 for 2025?

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    Debra Wittrock-

    Sage is aware of the federal legislation signed into law on July 4, 2025—The One Big Beautiful Bill Act (OBBBA)—which introduces significant changes to how federal withholding taxes apply to overtime and tipped income.

    At this time, no immediate changes are being made to Sage’s federal withholding calculations. The IRS has issued interim guidance (FS-2025-03), but final documentation regarding year-end reporting requirements is still pending. Since the new deductions are claimed by employees when filing their 2025 tax returns, employers should continue withholding taxes as usual throughout the remainder of the year.

    If you have questions about how these changes may affect your business or individual tax situation, we recommend consulting with your tax advisor.

    For more information on this, please see enclosed link to the Knowledge Base article.  This article will be updated as new information becomes available.

     

    New Federal law regarding no federal withholding on tips and overtime

    Sincerely,

    Coleen

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  • 0
    verified answer

    Debra Wittrock-

    Sage is aware of the federal legislation signed into law on July 4, 2025—The One Big Beautiful Bill Act (OBBBA)—which introduces significant changes to how federal withholding taxes apply to overtime and tipped income.

    At this time, no immediate changes are being made to Sage’s federal withholding calculations. The IRS has issued interim guidance (FS-2025-03), but final documentation regarding year-end reporting requirements is still pending. Since the new deductions are claimed by employees when filing their 2025 tax returns, employers should continue withholding taxes as usual throughout the remainder of the year.

    If you have questions about how these changes may affect your business or individual tax situation, we recommend consulting with your tax advisor.

    For more information on this, please see enclosed link to the Knowledge Base article.  This article will be updated as new information becomes available.

     

    New Federal law regarding no federal withholding on tips and overtime

    Sincerely,

    Coleen

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