What Do Employers Need to Know About OBBB Tax Credits and Deductions?
In July, the “One Big Beautiful Bill Act” (OBBBA) was signed by the President. This new law includes significant changes impacting employers. These changes cover employee deductions for tips and overtime, and they expand the paid family and medical leave tax credit.
In summary, the new legislation includes the following changes for employers:
- Tax deduction for employee tips up to $25,000 for tax years 2025 through 2028.
- Tax deduction for employee overtime wages up to $12,500 for single filers, $25,000 for joint filers for tax years 2025 through 2028.
- Calculation options expand for the paid family and medical leave tax credit for businesses.
- How the OBBB hopes to expand HSA eligibility.
- Annual maximum for dependent care FSAs increased. Should you allow the increase in your plan? How can it impact nondiscrimination testing.
After this session, you'll walk away with a clear understanding of how the new bill affects HR and benefits strategy and practical steps employers can take to stay compliant and protect their people.
Don't wait for compliance challenges. Visit the Federal Policy Hub for Employers for the latest updates and connect with a OneDigital team member to proactively secure your compliance strategy.
