December 2025
 

New Federal Deductions for Qualified Overtime and Qualified Tips – How ADP Will Support You for Tax Years 2026 to 2028

01/08/26

As we previously reported, H.R.1, the One Big Beautiful Bill Act (the Act), was signed into law on July 4, 2025.  The Act includes a federal income tax deduction for qualified overtime and qualified tips, effective for tax years 2025 through 2028. 

For tax years 2026 through 2028, employers and payors are expected to report qualified overtime and qualified tip amounts on year-end informational tax returns. While overtime and tip information will be accumulated throughout the year, this is an annual requirement to report qualified amounts to your employees.
Tuesday, January 6, 2026/Author: ADP Admin/Number of views (3)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: Compliance Corner01/08/26

Treasury, IRS Provide Guidance for Tax Year 2025 for Individuals Claiming Deductions for Qualified Overtime and Qualified Tips

01/08/26

The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued Notice 2025-69 (Notice 2025-69 or the Notice) on Nov.  21, 2025. The Notice offers guidance to individuals for claiming deductions for qualified overtime and qualified tips for tax year 2025. This guidance applies to new deductions for overtime and tips included in H.R. 1, The One Big Beautiful Bill Act (the Act), which was signed into law on July 4, 2025.  Review the details here. 

Monday, January 5, 2026/Author: ADP Admin/Number of views (15)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: 01/08/26

Treasury, IRS Provide Penalty Relief for Tax Year 2025 for Information Reporting on Tips and Overtime Under the One Big Beautiful Bill Act

12/04/25

The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued Notice 2025-62 (the Notice) on November 5, 2025. The Notice offers transition-year penalty relief to employers, payroll services providers, and third-party settlement organizations (TPSOs) for tax year 2025 regarding new information reporting requirements under H.R. 1, “The One Big Beautiful Bill Act” (the Act), which was signed into law on July 4, 2025.

Additional guidance tipped occupations (including possible updates to the list of Treasury tipped occupation codes) and the exclusion for specified service trade or business will be released by the Internal Revenue Service (IRS) in the future.

Review the details here.
Tuesday, December 2, 2025/Author: ADP Admin/Number of views (1817)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: Compliance Corner12/04/25

Review Pay Frequency Laws in States Where You Have Employees Working

12/04/25

Federal law does not address how often or when wages must be paid to employees. However, most states have pay frequency laws detailing such requirements. Some states have different pay frequency requirements based on industry or employee classification (exempt or nonexempt). While certain states allow employees to be paid monthly, other states require semi-monthly, bi-weekly, or even weekly payment. We highlight some of the unique laws here including for example laws in New York, California and Rhode Island.

A general overview of pay frequency and pay timing requirements by state is available here.  
Monday, December 1, 2025/Author: ADP Admin/Number of views (2016)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: Compliance Corner12/04/25

Pension Plan Limitations for 2026 Provided by IRS

12/04/25

Pension Plan Limitations for 2026 have been released by the IRS.  The 401(k)-contribution limit is increased to $24,500. Any individual making $150,000 or more in FICA wages in 2025 must make catch-up contributions in 2026 on a post-tax basis (Roth).
Monday, December 1, 2025/Author: ADP Admin/Number of views (1824)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: Compliance Corner12/04/25

IRS Announces 2026 Benefit Plan Contribution Limits

12/04/25

On Oct.  9, 2025, the Internal Revenue Service (IRS) announced via Revenue Procedure 2025-32   the dollar limitation for 2026 on employee salary reductions for contributions to health flexible spending accounts; the monthly limitation regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass; and the maximum amount that can be excluded from an employee’s gross income for the amounts paid for qualified adoption expenses furnished pursuant to an adoption assistance program.
Monday, December 1, 2025/Author: ADP Admin/Number of views (1998)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: Compliance Corner12/04/25

IRS Announces 2026 Social Security Wage Base

11/06/25

On Oct. 24, 2025, the Social Security Administration (SSA) announced the 2026 wage base. The annual wage base limit is the maximum amount of employee wages that are subject to the social security tax for the calendar year.

The 2026 social security wage base will be $184,500, which is an increase of $8,400 from $176,100 in 2025.    
Tuesday, November 4, 2025/Author: ADP Admin/Number of views (3339)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: Compliance Corner11/06/25

E-Verify Resumes Operations as Government Shutdown Continues

11/06/25

The Department of Homeland Security (DHS) recently posted an update to the E-Verify site indicating that E-Verify application is now operational.
Tuesday, November 4, 2025/Author: ADP Admin/Number of views (2791)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: Compliance Corner11/06/25

DHS Ends Auto-Extensions for Many EAD Renewal Applications Effective Oct. 30, 2025

11/06/25

On Oct. 29, 2025, the U.S. Department of Homeland Security (DHS) announced an Interim Final Rule (IFR) to end the practice of automatically extending the validity of certain EADs when a renewal application for employment authorization was timely filed.
  
Tuesday, November 4, 2025/Author: ADP Admin/Number of views (3132)/Comments (0)/
Categories: Compliance Corner State Compliance UpdateFederal Compliance Update
Tags: Compliance Corner11/06/25

What to Expect During a Federal Government Shutdown

10/02/25

With the government shutdown that occured at midnight on Sept. 30, 2025, we have outlined key areas of potential impacts to your HR operations, along with important employer obligations.
Tuesday, September 30, 2025/Author: ADP Admin/Number of views (4163)/Comments (0)/
Categories: Compliance Corner Federal Compliance Update
Tags: Compliance Corner10/02/25
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