The IRS has released new guidance to help employers and other payers navigate reporting requirements for cash tips and qualified overtime compensation under the One Big Beautiful Bill Act.
Notice 2025-62 provides penalty relief from the new information reporting requirements related to the new deduction — specifically, employers and other payers will not be penalized for failing to file correct information returns or providing correct payee statements to employees and other payees in 2025 for purposes of the deductions.
The relief is limited to returns and statements filed and provided for tax year 2025 and applies only to the extent that the person required to make the return or statement otherwise files and provides a complete and correct return or statement.
The IRS and Treasury said they will treat tax year 2025 as a transition period for IRS enforcement and administration of the new information reporting requirements for cash tips and qualified overtime compensation under the OBBBA. Read more.