The H.R. 1, The One Big Beautiful Bill Act (the Act), was signed into law on July 4, 2025. The Act includes several significant changes that are relevant to companies for payroll, employment tax and employee benefits purposes, with some key provisions effective retroactively as of Jan. 1, 2025. For additional background information, review our prior article.
The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) commenced issuing guidance explaining how certain provisions of the Act will be implemented. The guidance covers the new tax deductions on certain tips and overtime pay, Trump accounts, research and development expenditures, and expiring energy incentives.
The guidance released to date by Treasury and the IRS provides companies with helpful information as they begin planning for the remainder of 2025 and beyond. However, significant information needed for implementation of the new federal income tax deductions for qualified overtime and qualified tips remains outstanding, and ADP will monitor for further guidance and updates.
Review the details here.