The IRS and the Department of the Treasury issued frequently asked questions related to the new deduction for qualified overtime compensation under the Republican tax law enacted last summer.
For tax years 2025 through 2028, individuals can deduct the overtime portion of their “time-and-a-half” pay that exceeds their regular rate as reported on W-2s or 1099s.
The FAQs provide details on the deduction, resources for employees to determine if their overtime pay qualifies under the Fair Labor Standards Act, and reporting differences between 2025 and later years.
The IRS previously issued guidance on penalty relief for employers in 2025 regarding ...
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