Skip to main content
General information

One Big Beautiful Bill Act (OBBBA) of 2025

The One Big Beautiful Bill Act of 2025 introduces changes to depreciation, Section 179 limits, and deductions for tips and overtime. Review the software updates and resources to help your clients comply with the new law.
On July 3, 2025, the U.S. Congress passed the One Big Beautiful Bill Act (OBBBA) of 2025, which President Trump signed into law on July 4, 2025.

Updates

The IRS issued Notice 2025-69, which provides important clarification for workers claiming deductions for tips and overtime compensation on their 2025 tax returns. This notice explained how individuals can calculate their eligible deduction amounts for cash tips and qualified overtime, even if their employer does not provide separate or additional documentation—such as updated information returns or supplemental statements.
For tax year 2025, employees may use existing records (like Forms W-2, 1099, pay stubs, or personal tip logs) to substantiate their claims. Additionally, the IRS granted transition relief for workers in specified service trades or businesses, allowing them to claim tip deductions for 2025 under expanded eligibility rules.
note
Besides the IRS resources previously listed, if your client needs guidance on determining the specific qualified overtime compensation and/or qualified tip amounts that employees should use for the allowable deduction on Schedule 1A (Form 1040), the following resources may be a good starting point to help you determine accurate 2025 amounts:
  • Review YTD amounts on the employee’s final tax year 2025 paycheck stub.
  • Generate the
    Payroll Journal with Detailed Hours
     report for calendar year 2025.
  • Check the Year-to-Date column on the
    Employee Earnings
     report for calendar year 2025
On November 5, 2025, the IRS issued additional guidance for tax year 2025 reporting through Notice 2025-62. This notice indicated that employers and other payors will not be penalized for failing to provide separate accounting of amounts reasonably designated as cash tips or qualified overtime compensation.
During the summer of 2025, the IRS announced that there would be no changes to certain information returns or withholding tables for tax year 2025 related to the new law.
To learn more about which employees and amounts may be eligible for qualified overtime compensation and/or qualified tips, refer to One, Big, Beautiful Bill provisions.

Implications for Accounting CS

We added the following OBBBA-related features:
  • v2026.1.2 – Released on May 14, 2026:
    • Updated Forms W‑2 and W‑3 (all copies except black‑and‑white Copy A and W‑3) to include
      Treasury Tipped Occupation Code (TTOC)
       values in
      Box 14b
      .
    • Updated the
      Employee Data
       tab (in the
      Edit Payroll Tax Forms
       screen) to support TTOC values reported in
      Box 14b
       of Form W‑2.
    • Added TTOC
      Box 14b
       variables to the Layout Designer for W‑2 and W‑2c layouts.
  • v2026.1.1 – Released on April 23, 2026:
    • New
      W-2 Box 14b
       data entry fields for Treasury tipped occupation codes in the
      Personal
       tab of the
      Employees
       screen.
      • note
        The new
        W-2 Box 14b
         Treasury tipped occupation codes will apply to tax year 2026 reporting and future years, and won't affect tax year 2025 W-2s.
  • v2026.1.0 - Released on March 26, 2026:
    • Pay items with
      W-2 Box 12 code TT
       and a
      Salary – Hours sensitive
       calculation type will now auto-calculate the OBBBA OT amount during check entry.
  • v.2025.4.4 - Released on February 19, 2026:
    • OBBBA Overtime Calculation settings for pay items.
    • Methods for auto-calculating the
      OBBBA OT
       field during payroll check entry.
    • Updated the
      OBBBA OT
       field to always be editable, including after checks are printed, or liabilities are generated.
    • Removed requirements for specific calculation type and overtime multiplier values for pay items set to W-2 box code TT.
  • v.2025.4.1 - Released on January 8, 2026:
    • New
      OBBBA OT
       data fields available in the
      Enter Batch Handwritten Payroll Checks
       screen.
  • v.2025.4.0 - Released on December 22, 2025:
    • New
      OBBBA OT
       data entry fields available in the
      Enter Transactions
       and
      Enter Batch Payroll Checks
       screens.
    • New
      W-2 Box 12 Codes TA
      ,
      TP
      ,
      TS
      , and
      TT
       available in the
      Payroll Items
       screen.
      note
      While you can add these codes to new and existing payroll items, they’ll apply to tax year 2026 reporting and future years, and won't affect tax year 2025 W-2s.
    • New Payroll > Check > OBBBA OT variables were added to the Report Designer and Layout Designer.
    • New OBBBA reports, specifically designed for tax year 2026 payroll processing, were published to the Accounting CS Library, where they can be downloaded and imported into Accounting CS.
      • OBBBA Qualified Overtime
      • OBBBA Qualified Tips
    • New federal withholding tax tables incorporating the new OBBBA provisions for tax year 2026 were made available.

Future updates

  • New 2026 Form W-2, which splits
    Box 14
     into
    Box 14a
     and
    14b
    , once finalized by the IRS.
  • New
    W-2 Box 14b
     data entry fields for Treasury tipped occupation codes in the
    Personal
     tab of the
    Employees
     screen.
    note
    The new
    W-2 Box 14b
     Treasury tipped occupation codes will apply to tax year 2026 reporting and future years, and won't affect tax year 2025 W-2s.
  • State conformity changes related to the OBBBA provisions as they are announced and enacted by state taxing authorities.

Resources

If you're a Thomson Reuters Checkpoint subscriber, you have exclusive access to the
Checkpoint Executive Summary: The Act of 2025
, which highlights the main provisions of the new law. You’ll also find ready-to-send legislation letters for your individual, business, and payroll clients, outlining key changes, important dates, and relevant IRC sections to help them prepare and plan for the updates.
The IRS has a fact sheet FS-2025-03 discussing some of the new provisions for working Americans and seniors. The IRS also announced there's no changes to individual information returns or withholding tables for 2025 under OBBBA.

This article applies to:

  • Product: Accounting CS
  • State: All states
  • Subject: One Big Beautiful Bill Act (OBBA)

Related Content

error-icon

Triva isn't available right now.

Check out the support page for our phone number and hours

error-close