2026 Tips and Overtime Deduction: Employer Guide
What are the new 2026 tips and overtime deduction rules for employers? For tax years 2025 through 2028, employees can deduct up to $25,000 of qualified tips and up to $12,500 of qualified overtime pay ($25,000 for joint filers). The tips and overtime deduction is claimed on the employee’s return, but it creates new payroll…