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FAQs on qualified tip and overtime deductions

Jan 23, 2026 · 1 min read

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Under H.R. 1, P.L. 119-21, the law known as the One Big Beautiful Bill Act (OBBBA), new federal income tax deductions are available for qualified tips and qualified overtime compensation. These deductions are effective for tax years 2025 through 2028.

  • IRS Fact Sheet 2026-01, provides answers to frequently asked questions (FAQs) on the new qualified overtime compensation deduction, outlining eligibility and limitations on reliance. The IRS will update these FAQs as guidance evolves.

  • IRS Notice 2025-69, released on Nov. 21,

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