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No Tax on Tips or Overtime in the OBBBA: What Employers Need to Know

By , , and 1 Min Read

On July 4, President Trump signed the ‘One Big Beautiful Bill Act’ into law, including provisions reducing federal income tax on qualified tips and overtime compensation.

For employers, the new law raises a host of practical questions:

  • What do employers need to track and report?
  • How will payroll systems need to adapt?
  • What guidance can we expect as we move forward?
  • How might state tax rules interact with these federal changes?

In this video chat, our Employment & Compensation and Tax partners unpack this significant development in federal tax policy. Tune in to discover what these changes may mean for your operations, and for practical tips to navigate the new law.

Watch Now

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Anne Batter is a partner in Baker McKenzie's Tax Practice Group with over 35 years of tax experience. She focuses her practice on the tax treatment of executive compensation and fringe benefits arrangements. She also handles excise tax matters, particularly those involving the air transportation excise tax. She previously served as an attorney in the Income Tax & Accounting Division of the IRS’s Office of Chief Counsel and as attorney-advisor with the US Tax Court.

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Ligeia Donis is a partner in Baker McKenzie's Tax Practice Group, based in the Firm’s DC office. Ligeia advises multinational companies on compensation and benefits tax-related matters, including compliance, tax controversy and dispute resolution, and voluntary disclosures. Ligeia has significant experience advising multinational companies with complex matters related to US federal employment tax, information reporting, and compensation and benefits rules as part of globally integrated solutions supporting workforce and workforce mobility. She regularly handles matters including worker classification, employment tax and wage-based tax credits, self-employment tax, taxation of employee benefits, equity and deferred compensation, and information reporting and withholding requirements for US and non-US citizens.

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Michael Brewer serves as the Firm's Global and North American Chair of the Employment & Compensation Practice. A trial lawyer who represents global and domestic clients in employment and trade secrets litigation, Michael has tried class action and single-plaintiff cases before judges, juries, and arbitrators. Super Lawyers has repeatedly recognized Michael for his superior defense of employment claims. Michael focuses on employment law disputes and trial work. Michael's practice encompasses a wide range of labor and employment matters, including the defense of wage and hour class actions, discrimination, wrongful discharge in addition to employment contract, trade secrets, non-competition, whistleblower, sexual harassment and related claims. He regularly represents clients in employment litigation in federal and state courts, arbitration, and in proceedings before various administrative agencies, including the Equal Employment Opportunity Commission, the US Department of Labor and state agencies throughout the United States. Michael has served as an instructor with the National Institute of Trial Advocacy teaching trial and deposition skills to other lawyers. Clients often call upon Michael to step into difficult cases previously handled by other firms.

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Robin Samuel leads Baker McKenzie’s US Labor & Employment team, is co-chair of the Firm’s Workforce Redesign service line, and is a Steering Committee member for the North American Employment and Compensation practice. Robin helps clients manage and resolve local and cross-border employment issues, whether through counseling or litigation.

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