On August 6, 2026, the IRS issued Fact Sheet FS-2026-13, providing its most detailed guidance yet about the One Big Beautiful Bill Act’s (OBBBA) tax deduction for qualified overtime compensation. The new Fact Sheet identifies frequently asked questions and provides answers related to the deduction. For public agencies, the message is clear: 2026 payroll systems
Public agency employers are no strangers to complex wage and hours rules, but the recently enacted “One Big Beautiful Bill Act” (OBBBA) raised new questions with the introduction of the deduction for qualified overtime compensation. See LCW’s prior blog post about the OBBBA. While the focus of the OBBBA’s overtime deduction has been on
Since our original post detailing the tracking and reporting requirements imposed by the One Big Beautiful Bill Act (“OBBBA”) for federal tax deduction of qualified overtime compensation (i.e., Fair Labor Standards Act (FLSA) overtime), the IRS has announced significant guidance for 2025 reporting.
For Tax Year 2025, Employers Are Not Required to Separately Report Qualified