One of the fastest trending topics in the employment and taxation blogosphere in recent weeks has been the passage of the One Big Beautiful Bill Act (OBBBA), which, among other provisions...
One of the fastest trending topics in the employment and taxation blogosphere in recent weeks has been the passage of the One Big Beautiful Bill Act (OBBBA), which, among other provisions, allows for a tax deduction of up to $12,500 ($25,000 for joint filers) in "qualified overtime compensation."
The fact that the OBBBA provides for a tax deduction can be interpreted as good news for employers in the short term, because it means they are not required to immediately change withholding amounts on a paycheck-by-paycheck basis. Rather, employers will have to record and report qualifying overtime compensation on employees' end of year tax forms. This means that the primary thing employers need to carefully assess right now is their time tracking and recordkeeping systems to ensure they can satisfy the new reporting requirements at year's end.
You may be asking yourself, "how hard could that be?" Well, a potentially overlooked aspect of the OBBBA looms large on this point: what overtime compensation actually "qualifies" for the deduction?
The answer to that question is surprisingly nuanced, so let's break it down.
The OBBBA, as a federal law, does not and cannot exempt overtime wages from all taxes; it can only impact employees' federal taxes. This is precisely why the OBBBA defines overtime...
The offshore world has always attracted strong opinions. It’s complex, global, and full of moving parts that most people don’t fully understand. Mix that with online anonymity and you suddenly hav...