If an employee’s FLSA status is changing, explain what it means for their day-to-day work, pay structure, and expectations. This portion of the analysis should be conducted in partnership with your attorney, as this is very fact-specific. Job titles alone will not determine what is overtime whether a role is exempt or non-exempt.

Tax Treatment of Tips and Overtime: Answers to Your Employees’ FAQs

• The new FLSA salary exemption rules are definitely a big deal, but they don’t have to land you on the naughty list next year.
• This documentation can be critical in substantiating your case if it escalates to legal action.
• The payout for each winner is determined prior to the game, based on how much the group is willing to put in.
• Use the 1A screen to enter the qualified overtime compensation included on Form W-2, box 1 (line 14a) and the qualified overtime compensation included on Form 1099-NEC, box 1 or Form 1099-MISC, box 3 (line 14b).
• A Badgers victory would have gone a long way in helping secure a spot in the March Madness field.
• Lamar Wilkerson drove the right side of the lane and drew a fifth foul on John Blackwell with 2.8 seconds left in overtime.

Here’s whose tips may be exempt from federal tax, and how much won’t be taxed—plus details on claiming this deduction on your tax return. To meet the new rules, employers may need to update payroll and accounting systems and adjust their reporting to accurately disclose overtime amounts to employees. The IRS confirmed for the 2025 tax year, there will be no changes to Form W-2, Form 941, or other federal tax forms related to the new overtime and tip deductions under the new tax law. Employers should continue reporting overtime and tips using the same procedures as in previous years. The “no tax on overtime” provisions are included in Section of the One Big Beautiful Bill Act (OBBB), which was signed into law on July 4, 2025. These provisions have generated considerable confusion among employers and employees.

Is Overtime Pay Taxable?

Boxes 14a and 14b are direct entry fields that do not flow from any other form or screen. The OBBBA offers a meaningful overtime tax break for employees, but it also requires rigorous compliance and proactive communication from employers. With the right preparation, employers can turn this challenge into an opportunity to reinforce trust and transparency with their workforce. Employers with employees earning qualified overtime or qualified tips should communicate with employees about the changes. Employers should also watch for more information and updates as it is released in ADP’s H.R.1 Resource Center. ADP is closely monitoring developments and will provide updates as more details emerge.

Former NFL lineman dead at 56 as family blames CTE

• ADP is closely monitoring developments and will provide updates as more details emerge.
• Familiarizing yourself with these common scenarios can help you navigate the complexities of overtime pay.
• Similarly, jobs in sectors like construction or hospitality might have unique overtime rules due to the nature of the work.
• However, excessive overtime can lead to employee burnout and reduced productivity.
• Understanding the phase-outs and the nuts and bolts of the new deduction will be key for tax professionals as they guide clients through the upcoming filing season.

It also included a separate provision called “No Tax on Tips,” which allows certain taxpayers in eligible occupations to deduct up to $25,000 in voluntary tipped income from their federal tax return. Beginning in 2026, employers must track qualified overtime separately so it can be reported with a new Form W‑2 Box 12 code TT. Qualified overtime includes only overtime paid under FLSA overtime rules. Overtime paid outside of FLSA guidelines does not qualify and must be tracked separately.

Imagine Sarah, an hourly employee who works as a customer service representative. Her regular hourly wage is $20, and she typically works a 40-hour week. Employers must be vigilant in understanding and adhering to both federal and state laws.

• Mike Tirico will be the play-by-play announcer for the Super Bowl for the first time in his career, as the last time NBC held the rights to the Super Bowl, Al Michaels still held that role.
• The codes range from life insurance coverage to the amount you contributed to an employee’s adoption expenses.
• Understanding these common pitfalls can help both parties avoid disputes and maintain compliance with labor laws.
• This deduction only applies to the premium portion of your overtime pay.
• This basic formula helps ensure that employees are compensated for the extra effort and time spent on the job, particularly when working long hours can impact their health and well-being.
• To understand how important work is outside typical business hours, maintain productivity, and prevent employee burnout, this article is here to help you learn more about it.

The Badgers https://www.karmagrup.com/2022/04/27/top-5-mistakes-to-avoid-in-accounting-for/ used a 10-0 run to get back into the game down the stretch. Lamar Wilkerson drove the right side of the lane and drew a fifth foul on John Blackwell with 2.8 seconds left in overtime. Lamar Wilkerson drew a foul with 2.8 seconds left in overtime and hit a pair of free throws to clinch IU’s win. The Hoosiers (16-8, 7-6 Big Ten) get an important mark in a tournament resume comparison with the Badgers (16-7, 8-4). This is not intended as legal advice; for more information, please click here.

End of Period 1: Michigan State 2, Michigan 0

Conor Enright hounded Wisconsin’s leading scorer Nick Boyd throughout the game and drew an offensive foul on Boyd to set up Wilkerson’s game-winning free throws. He chased after Boyd through screens and wouldn’t allow him any daylight while attacking the basket. BLOOMINGTON — Lamar Wilkerson knocked down a pair of free throws with 2.8 seconds left in overtime to give Indiana basketball a win over Wisconsin on Saturday, Feb. 7.

Wisconsin vs IU basketball score

FLSA audits are a legal analysis that should be conducted in conjunction with your employment counsel or General Counsel. Paycor’s Payroll and HR solutions are intuitive, flexible, and backed by solid https://www.bookstime.com/ tax and compliance expertise. Regulations at the local, state, and federal levels are constantly evolving and chances are high that you don’t have extra time in your day to keep up. While the immediate effect on payroll processing is minimal for 2025, employers should prepare for potential changes in withholding requirements for future years. Changes to withholding requirements after 2025 may require system updates.