No Change to 2025 Form W-2 and Employer Assistance is Encouraged but Optional for Employee 2025 Federal Overtime Premium Tax Deduction Under One Big Beautiful Bill Act (OBBBA)

As reported in our mid-year newsletter, employees for tax years 2025 through 2028 are eligible to claim a deduction for overtime premiums paid under federal law.  The deduction is for the federal weekly overtime premium (i.e., 0.5x premium factor of the 1.5x overtime payment).  The maximum tax deduction per employee taxpayer aggregated across all paying employers is $12,500 ($25,000 married filing jointly), and the deduction contains a graduated phase-out for high wage earners ($150,000-$275,000 and $300,000-$550,000 for married filing jointly).  The IRS has issued transitional guidance for employers for the 2025 tax year that there will be no changes to the 2025 Form W-2 and that employers are encouraged but not required to provide employees any kind of support on the amount of the potentially deductible overtime premium.  Employers choosing to offer support need to use a reasonable method for determining the estimated deductible overtime premium.  EP is planning to offer talent and crew paid by EP some support for the employee to look up estimated amount of 2025 EP-paid federal overtime premium that may be deductible; EP expects its self-serve support to be available by end of January 2026.  Ultimately, employee taxpayers must work with their tax advisors on the right amount of overtime premium deduction to claim as the employee taxpayer is solely responsible for their personal tax return.