[{"data":1,"prerenderedAt":457},["ShallowReactive",2],{"$AT5N6C5dAI":3},{"story":4,"region":456},["Reactive",5],{"name":6,"created_at":7,"published_at":8,"updated_at":9,"id":10,"uuid":11,"content":12,"slug":449,"full_slug":450,"sort_by_date":47,"position":451,"tag_list":452,"is_startpage":15,"parent_id":453,"meta_data":47,"group_id":454,"first_published_at":8,"release_id":47,"lang":53,"path":47,"alternates":455,"default_full_slug":47,"translated_slugs":47},"What The One Big Beautiful Bill Act Means for Overtime Workers and Tax Reporting","2026-05-18T23:52:53.837Z","2026-05-19T00:24:56.145Z","2026-05-19T00:24:56.162Z",178007137667351,"8b6f299b-4477-4af7-98c0-73883469829a",{"seo":13,"_uid":19,"AI_SEO":14,"author":20,"content":56,"headline":6,"component":407,"post_date":408,"thumbnail":409,"types_tag":418,"features_tag":446,"show_resource":55,"industries_tag":447,"related_articles":448},{"schema":14,"noindex":15,"seoTitle":16,"seoRating":15,"seoKeywords":17,"seoTitleInput":6,"seoDescription":18},"",false,"What The One Big Beautiful Bill Act Means for Overtime Workers and Tax Reporting — Deputy","OBBBA, overtime, overtime workers, tax reporting","Uncover what the OBBBA entails and how it impacts shift workers and new compliance mandates.","cd53289f-e6a2-4469-a0c7-efece0ae94f1",{"name":21,"created_at":22,"published_at":23,"updated_at":24,"id":25,"uuid":26,"content":27,"slug":45,"full_slug":46,"sort_by_date":47,"position":48,"tag_list":49,"is_startpage":15,"parent_id":50,"meta_data":47,"group_id":51,"first_published_at":52,"release_id":47,"lang":53,"path":47,"alternates":54,"default_full_slug":47,"translated_slugs":47,"_stopResolving":55},"Diana Lam","2021-12-01T00:43:09.606Z","2026-04-30T23:31:59.948Z","2026-04-30T23:31:59.959Z",89512112,"9f515bca-233e-48f3-8c87-406bb431d204",{"_uid":28,"name":21,"image":29,"component":43,"description":44},"bdd96c32-8ce6-4640-a64d-fd92ea87c016",{"_uid":30,"title":31,"imgSrc":14,"plugin":32,"imageAlt":33,"minWidth":34,"imageName":35,"imageS3Key":36,"description":37,"mobileWidth":38,"desktopWidth":38,"assetSelector":14,"imagePublicUrl":39,"imageOriginalUrl":40,"sourceImageWidth":41,"sourceImageHeight":42},"a6e639c9-5120-4afb-ade1-fa0251b8d4c0","Deputy Images","deputy-images","Diana headshot",188,"hs.png","f/64010/898x1154/a888257ffd/hs.png","A images plugin to ensure consistent, reliable image uploads with strict SEO metadata requirements",94,"https://s3.amazonaws.com/a.storyblok.com/f/64010/898x1154/a888257ffd/hs.png","//a.storyblok.com/f/64010/898x1154/a888257ffd/hs.png",898,1154,"blog-author","Diana is a Lead Content Marketing Manager at Deputy. She's passionate about helping people and connecting them with informative content. In her spare time, she enjoys traveling and exploring different cuisines.","diana-lam","_content_types/authors/diana-lam",null,-550,[],11461645,"926d04be-3689-4283-a72a-8408468200ee","2021-12-01T03:16:27.494Z","default",[],true,[57],{"_uid":58,"content":59,"component":406},"e800de11-e5ed-452e-93f8-e04e61248ae6",{"type":60,"content":61},"doc",[62,76,110,120,128,138,146,172,180,188,209,217,225,233,241,249,257,335,343],{"type":63,"attrs":64,"content":65},"paragraph",{"textAlign":47},[66],{"text":67,"type":68,"marks":69},"Key Takeaways:","text",[70,74],{"type":71,"attrs":72},"textStyle",{"color":73},"#000000",{"type":75},"bold",{"type":77,"content":78},"bullet_list",[79,90,100],{"type":80,"content":81},"list_item",[82],{"type":63,"attrs":83,"content":84},{"textAlign":47},[85],{"text":86,"type":68,"marks":87},"The One Big Beautiful Bill Act (OBBBA), also known as Public Law 119-21, is intended to help eligible workers retain more of their overtime earnings at tax time, subject to IRS rules and individual tax circumstances.",[88],{"type":71,"attrs":89},{"color":73},{"type":80,"content":91},[92],{"type":63,"attrs":93,"content":94},{"textAlign":47},[95],{"text":96,"type":68,"marks":97},"While the 2025 tax year served as a transition phase, separate reporting for Qualified Overtime Compensation is officially mandatory for all employers in 2026.",[98],{"type":71,"attrs":99},{"color":73},{"type":80,"content":101},[102],{"type":63,"attrs":103,"content":104},{"textAlign":47},[105],{"text":106,"type":68,"marks":107},"Manual spreadsheet auditing introduces admin hurdles and risks. Capturing labor data at the source helps keep your reporting organized and verifiable for payroll purposes.",[108],{"type":71,"attrs":109},{"color":73},{"type":63,"attrs":111,"content":112},{"textAlign":47},[113,115],{"type":114},"hard_break",{"text":116,"type":68,"marks":117},"A major change to federal employment taxes is officially in effect, and your team is likely already asking questions. It’s called the One Big Beautiful Bill Act (OBBBA), and it’s designed to help employees who work overtime keep more of what they earn.",[118],{"type":71,"attrs":119},{"color":73},{"type":63,"attrs":121,"content":122},{"textAlign":47},[123],{"text":124,"type":68,"marks":125},"Historically, the harder your team worked, the more their extra earnings were consumed by federal taxes. This legislation changes the federal tax treatment of certain overtime earnings for eligible workers. As a manager, this is your opportunity to guide your team through these updates so they can better understand how these changes may impact their earnings and tax reporting.",[126],{"type":71,"attrs":127},{"color":73},{"type":129,"attrs":130,"content":132},"heading",{"level":131,"textAlign":47},2,[133],{"text":134,"type":68,"marks":135},"Understanding qualified overtime compensation and its limitations ",[136],{"type":71,"attrs":137},{"color":73},{"type":63,"attrs":139,"content":140},{"textAlign":47},[141],{"text":142,"type":68,"marks":143},"The core of the OBBBA is how it treats the “extra” portion of an overtime check. When your team works overtime, they typically earn time-and-a-half. The IRS refers to that “half,” the portion of pay exceeding the regular rate of pay as required under the FLSA, as Qualified Overtime Compensation. ",[144],{"type":71,"attrs":145},{"color":73},{"type":63,"attrs":147,"content":148},{"textAlign":47},[149,154,167],{"text":150,"type":68,"marks":151},"This specific portion is now a ",[152],{"type":71,"attrs":153},{"color":73},{"text":155,"type":68,"marks":156},"federal tax deduction",[157,162,165],{"type":158,"attrs":159},"link",{"href":160,"uuid":47,"anchor":47,"target":47,"linktype":161},"https://www.irs.gov/newsroom/questions-and-answers-about-the-new-deduction-for-qualified-overtime-compensation","url",{"type":71,"attrs":163},{"color":164},"#1155CC",{"type":166},"underline",{"text":168,"type":68,"marks":169}," for eligible workers. For an employee reaching the maximum limit of $12,500, subject to individual tax situations, that’s a significant amount of money staying in their bank account instead of being withheld. It ensures that the extra effort of working late translates into a tangible financial benefit. ",[170],{"type":71,"attrs":171},{"color":73},{"type":129,"attrs":173,"content":174},{"level":131,"textAlign":47},[175],{"text":176,"type":68,"marks":177},"Identifying who actually qualifies for the deduction ",[178],{"type":71,"attrs":179},{"color":73},{"type":63,"attrs":181,"content":182},{"textAlign":47},[183],{"text":184,"type":68,"marks":185},"The legislation specifically addresses the core engine of your business: your hourly shift workers. Since the vast majority of employees earning consistent overtime operate on a shift-based schedule, this deduction directly benefits the staff powering your daily operations. To qualify, employees must be covered by (and not exempt from) the Fair Labor Standards Act (FLSA) overtime requirements and have a valid Social Security number. ",[186],{"type":71,"attrs":187},{"color":73},{"type":63,"attrs":189,"content":190},{"textAlign":47},[191,196,204],{"text":192,"type":68,"marks":193},"There is also an income phaseout to monitor: the full ",[194],{"type":71,"attrs":195},{"color":73},{"text":197,"type":68,"marks":198},"deduction",[199,201,203],{"type":158,"attrs":200},{"href":160,"uuid":47,"anchor":47,"target":47,"linktype":161},{"type":71,"attrs":202},{"color":164},{"type":166},{"text":205,"type":68,"marks":206}," is available to eligible taxpayers with modified adjusted gross income (MAGI) of $150,000 or less, or $300,000 or less for married couples filing jointly. Above those thresholds, the deduction is reduced and may be phased out entirely. The ultimate objective is to optimize take-home pay for frontline staff by reducing tax burden on their hardest-earned hours.",[207],{"type":71,"attrs":208},{"color":73},{"type":129,"attrs":210,"content":211},{"level":131,"textAlign":47},[212],{"text":213,"type":68,"marks":214},"Navigating reporting obligations and timelines",[215],{"type":71,"attrs":216},{"color":73},{"type":63,"attrs":218,"content":219},{"textAlign":47},[220],{"text":221,"type":68,"marks":222},"Understanding the shift from optional to mandatory reporting is crucial for staying ahead of this rollout. While the 2025 tax year served as a transition period where the IRS didn’t require businesses to report these numbers on W-2s (and employees claimed the deduction themselves using IRS Schedule 1-A), those rules have officially changed. ",[223],{"type":71,"attrs":224},{"color":73},{"type":63,"attrs":226,"content":227},{"textAlign":47},[228],{"text":229,"type":68,"marks":230},"Additional reporting requirements are expected to apply beginning with the 2026 tax year. Employers should monitor IRS guidance and consult payroll, legal, or tax professionals regarding implementation obligations. Staying aligned with this current standard ensures your team has the information needed to claim their benefits smoothly, without administrative delays. ",[231],{"type":71,"attrs":232},{"color":73},{"type":129,"attrs":234,"content":235},{"level":131,"textAlign":47},[236],{"text":237,"type":68,"marks":238},"Preparing your operations for the OBBBA rollout",[239],{"type":71,"attrs":240},{"color":73},{"type":63,"attrs":242,"content":243},{"textAlign":47},[244],{"text":245,"type":68,"marks":246},"For managers, adapting to the OBBBA isn’t just about understanding the legislation; it’s about verifying your back office is equipped to handle it. Depending on an employer’s payroll setup, isolating qualified overtime compensation may require additional reporting configuration or manual review. ",[247],{"type":71,"attrs":248},{"color":73},{"type":63,"attrs":250,"content":251},{"textAlign":47},[252],{"text":253,"type":68,"marks":254},"To avoid that administrative hurdle, you can start preparing your operations today by focusing on three key steps:",[255],{"type":71,"attrs":256},{"color":73},{"type":258,"attrs":259,"content":261},"ordered_list",{"order":260},1,[262,282,302],{"type":80,"content":263},[264,273],{"type":63,"attrs":265,"content":266},{"textAlign":47},[267],{"text":268,"type":68,"marks":269},"Communicate the new standard",[270,272],{"type":71,"attrs":271},{"color":73},{"type":75},{"type":63,"attrs":274,"content":275},{"textAlign":47},[276,281],{"text":277,"type":68,"marks":278},"Make sure your team understands what Qualified Overtime Compensation is and how the shift to mandatory reporting for the 2026 tax year will impact their W-2s moving forward.",[279],{"type":71,"attrs":280},{"color":73},{"type":114},{"type":80,"content":283},[284,293],{"type":63,"attrs":285,"content":286},{"textAlign":47},[287],{"text":288,"type":68,"marks":289},"Audit your current workflows",[290,292],{"type":71,"attrs":291},{"color":73},{"type":75},{"type":63,"attrs":294,"content":295},{"textAlign":47},[296,301],{"text":297,"type":68,"marks":298},"Evaluate whether your existing payroll setup can isolate these specific premiums, or whether manual intervention from your management team will be required. ",[299],{"type":71,"attrs":300},{"color":73},{"type":114},{"type":80,"content":303},[304,313],{"type":63,"attrs":305,"content":306},{"textAlign":47},[307],{"text":308,"type":68,"marks":309},"Establish a reliable data source",[310,312],{"type":71,"attrs":311},{"color":73},{"type":75},{"type":63,"attrs":314,"content":315},{"textAlign":47},[316,321,330],{"text":317,"type":68,"marks":318},"The most effective way to manage this shift is to capture the data accurately at the point of clock-in. By using a system like ",[319],{"type":71,"attrs":320},{"color":73},{"text":322,"type":68,"marks":323},"Deputy",[324,327,329],{"type":158,"attrs":325},{"href":326,"uuid":47,"anchor":47,"target":47,"linktype":161},"https://www.deputy.com/labor-compliance",{"type":71,"attrs":328},{"color":164},{"type":166},{"text":331,"type":68,"marks":332},", teams can capture and organize time and pay-related data at the source to support downstream payroll and reporting workflows. This enables you to generate a specialized Weekly Overtime Report providing structured time and pay data that may assist your payroll reporting workflows – reducing the need for manual workarounds. ",[333],{"type":71,"attrs":334},{"color":73},{"type":63,"attrs":336,"content":337},{"textAlign":47},[338],{"text":339,"type":68,"marks":340},"By securing this data early, you build a reliable foundation to help keep the data used to calculate your team’s tax savings organized and verifiable from the first clock-in to the final export. Every business is unique; it is always best practice to verify these outputs with a professional or payroll provider before filing. ",[341],{"type":71,"attrs":342},{"color":73},{"type":63,"attrs":344,"content":345},{"textAlign":47},[346,351,360,365,374,379,380,381,382,383,390,400],{"text":347,"type":68,"marks":348},"Navigating new compliance requirements doesn’t have to mean taking on hours of administrative work. To explore how tools like Deputy can help you streamline your reporting, ",[349],{"type":71,"attrs":350},{"color":73},{"text":352,"type":68,"marks":353},"connect with one of our experts today.",[354,357,359],{"type":158,"attrs":355},{"href":356,"uuid":47,"anchor":47,"target":47,"linktype":161},"https://www.deputy.com/contact-sales",{"type":71,"attrs":358},{"color":164},{"type":166},{"text":361,"type":68,"marks":362}," For additional support on key labor laws in the United States, visit our ",[363],{"type":71,"attrs":364},{"color":73},{"text":366,"type":68,"marks":367},"Compliance Hub",[368,371,373],{"type":158,"attrs":369},{"href":370,"uuid":47,"anchor":47,"target":47,"linktype":161},"https://www.deputy.com/compliance-hub",{"type":71,"attrs":372},{"color":164},{"type":166},{"text":375,"type":68,"marks":376}," to stay up to date.",[377],{"type":71,"attrs":378},{"color":73},{"type":114},{"type":114},{"type":114},{"type":114},{"text":384,"type":68,"marks":385},"Disclaimer: The information provided in this publication is for general informational purposes only. 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