OBBBA year-end guide
Other OBBBA Provisions Worth Knowing
Beyond tips and overtime, several OBBBA changes touch benefits, withholding, and information reporting. Here is what commonly affects employers.
Benefits and fringe changes
- Dependent care assistance: the maximum excludable benefit increases beginning in 2026 — plan documents and payroll limits may need updating.
- Employer payments of employee student loans under an educational assistance program are permanent and indexed for inflation, so this benefit can be planned for long term.
- Certain health plan changes expand HSA eligibility and direct primary care arrangements beginning in 2026, which can change benefit deduction setup.
Information reporting
- Thresholds for information returns for nonemployee payments increase, which changes when 1099s must be issued to contractors and vendors.
- Worker classification still matters: only employees can have qualified overtime or qualified tips reported on a W-2.
Withholding behavior
Because the tips and overtime deductions are claimed on the employee's return, employees may adjust their Form W-4 to reflect a lower expected tax liability. Expect W-4 questions and route employees to their own tax advisor rather than answering for them.
What to tell us
Note any benefit plan changes, new contractor arrangements, or multi-state expansion in the notes section of your submission so we can flag downstream payroll impacts.
This site is general educational information about payroll reporting under the One Big Beautiful Bill Act (OBBBA). It is not tax, legal, or accounting advice. Guidance from the IRS and Treasury continues to evolve — confirm your specific facts with your tax advisor and your Time & Pay representative before you rely on it.