As we reported in our Legislative Update last year, the federal government passed a law in 2025 with changes to the tax code that will allow employees to deduct “qualified overtime compensation” on their federal income taxes, up to certain amounts, and subject to specified caps on adjusted gross income. The IRS recently issued a new Fact Sheet with answers to frequently asked questions about the deduction, which can be accessed here. This law imposes new requirements on employers to track and report “qualified overtime compensation.”
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