IRS Guidance on Overtime and Tips for Tax Year 2025

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For Tax Year 2025, employers and other payers are not required to report qualified overtime compensation separately on Forms W-2, 1099-NEC, or 1099-MISC, due to this, Taxpayers may or may not have it reported on Forms W-2, 1099-NEC, or 1099-MISC. In instances where the amounts are not reported on the tax forms, preparers will need to manually calculate the qualified amounts.

For additional guidance regarding reporting Qualified Tips and Overtime, see the IRS resources below: 

• Questions and answers about the new deduction for qualified overtime compensation
• Treasury, IRS provide guidance for individuals who received tips or overtime during tax year 2025

Visit the Tax Pro Center to learn more about Tax update TY25:

• Tax Update TY25: Navigating the OB3 Act and more 

Resources for reporting in ProSeries: 

• Generating the Schedule 1-A in ProSeries

For more information about tax changes included in the One Big Beautiful Bill, visit:

• One, Big, Beautiful Bill provisions

If you have questions about how to enter tax information related to the One Big Beautiful Bill, we recommend subscribing to Hot Topics, where we post support articles covering Tax Year 2025 changes and how they relate to the product.

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