Skip to main content

Solutions

Products

Recommended products

Questions? We are here to help.
Contact us

Purchase

Questions? We are here to help.

Resources

General information

One Big Beautiful Bill Act (OBBBA) of 2025

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
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

With the Accounting CS v.2025.4.0 update, tentatively scheduled for December 22, 2025, we plan to release the following OBBBA-related features:
  • New
    OBBBA OT
     data entry fields available in the
    Enter Transactions
     and
    Enter Batch Payroll Checks
     screens.
    note
    Similar fields will be added to the
    Enter Batch Handwritten Payroll Checks
     screen in a subsequent release.
  • 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.
  • Federal withholding tax tables incorporating the new OBBBA provisions for tax year 2026.

Future updates

  • New OBBBA Reports for overtime and tips, specifically for tax year 2026 payroll processing, will be made available in the Accounting CS Library shortly after final IRS guidance is issued.
  • New
    W-2 Box 14b
     data entry fields for Treasury tipped occupation codes will be added to 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.

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)

error-icon

Triva isn't available right now.

Check out the support page for our phone number and hours

error-close