The One Big Beautiful Bill (OBBB) that passed in 2025 includes provisions designed to meet several campaign promises. Among these are the no tax on tips and the no tax on overtime. As we have covered previously, these changes to the law are not entirely straight forward because there are many limitations and exceptions to the rules making claiming these benefits challenging.
In addition to the complexity of the law changes, the reporting requirements are unlikely to go smoothly in 2025. In many cases, the impetus to report the portion of an employee’s income that may benefit from these provisions is put on the employer. However, employers are not required to meet the reporting requirements until 2026. So, an employee who may benefit from one of these provisions may be on their own to figure out what income may qualify for the tax benefit.
Our recommendation is for employees who think they may benefit from the no tax on tips or no tax on overtime provisions make sure to give their tax preparers copies of their paystubs for 2025 in addition to their form W-2.