IRS Notice: Penalty Relief for No Tax On Tip, Overtime Reporting Requirements (IRC §6721, §6722)

The IRS issued guidance providing penalty relief to employers and other payors regarding new information reporting requirements for qualified tips and qualified overtime compensation under the One Big Beautiful Bill. The relief applies only to the taxable year 2025 as a transition period and relates to failure to file accurate information returns and provide correct payee statements for the taxable year. Employers are encouraged to voluntarily provide this information to employees through alternative methods such as online portals or additional written statements. [IRS Notice 2025-62; IR-2025-110; (Nov. 05, 2025)]