On 16 December 2025, the Internal Revenue Service (IRS) issued two Notices addressing reporting obligations for tips and overtime under the Overtime and Bonus-Based Benefits Act (OBBBA).
The guidance provides transition relief for 2025, recognizing that employers and payors may not have updated systems or forms to comply with new requirements. It also explains how taxpayers can calculate deductions for tips and overtime when employer reporting is unavailable.
In addition, the notices signal future mandatory reporting obligations, indicating that structured compliance processes will be introduced in subsequent years.