b'LEGALLY SPEAKING CSIA 33NO TAX ON OVERTIME?Employers should note that the new deduction is notovertime hours and overtime premiums. These available for employer-sponsored rates that exceedrecords will support an employees deduction FLSA requirements (even if they are internally calledcalculations and will become essential once the overtime by the company), such as triple-time payexpanded reporting requirements take effect for PREPARING YOUR PAYROLL FOR THE NEW DEDUCTIONS for holidays, double-time pay for weekends, andthe 2026 tax year. Employers may wish to begin the like.In addition to any increase in the overtimeevaluating whether their payroll systems can calculation caused by the above, PTO or vacationaccommodate the new 2026 reporting fields, pay as hours worked is not deductible by thewhich will include separate accounting for qualified employee. Such wage multipliers may be requiredovertime amounts.by a policy, a collective bargaining agreement, or some state laws, but they are only deductible underPlanning Ahead for 2026 and Beyondthe new rule up to the amount actually mandated byBeginning with periods after December 31, 2025, federal wage-hour law. employers and other payors will be required to separately account for qualified overtime For example, if an employer pays overtime at acompensation on information returns and double-time rate (i.e., two times the regular rate)statements under the revised Code provision, once and the pay statement shows a single, aggregatethe IRS updates the relevant forms. The employer dollar amount for that overtime, the employeeshould use the remainder of 2025 to: would calculate the qualified overtime deduction by dividing the aggregate overtime amount by four,Review whether internal systems can track again reflecting only the FLSArequired half-timeFLSArequired overtime premiums separate from portion. other non-FLSA pay multipliers. Not surprisingly, calculating the deduction,Audit your workforce to ensure each employee especially in a collective bargaining setting, canis properly exempt from overtime before an be complicated.Employees confused about whatemployee brings an action for misclassification. wages actually qualify for their new individualMerely paying a weekly salary does not exempt deduction should consult an accountant.Asan employee. always, employers are cautioned against giving employees tax advice.Monitor forthcoming additional IRS guidance andCENTRAL STATES INSULATION ASSOCIATIONform revisions for the 2026 tax year. No Immediate Form W2 or 1099 Changes for 2025By Marc Fleischauer The IRS confirms that all federal wage-reportingTaking these steps now will support employees forms for 2025 will remain unchanged. Employersseeking to claim the new deduction and help ensure will not yet be required to separately reportemployer compliance as the OBBBA reporting qualified overtime amounts on Forms W-2 or 1099.regime phases inThe Notice allows employees to use supporting materials such as logs and wage statements toFor more information on this and other labor and identify qualifying overtime. Workers claiming theemployment law issues, including NLRB, EEOC, OSHA, overtime deduction must also make a reasonableand DOL matters, contact Bob Dunlevey or Marc effort to confirm that they were eligible under theFleischauer, Board Certified Labor and Employment FLSA for overtime, which may include requestingLaw Specialists at Taft Law, at (937) 2282838 or viainformation from their employer. rdunlevey@taftlaw.com or mfleischauer@taftlaw.com.Documenting Deductible Overtime AmountsWhile 2025 serves as a transition year, employers still need to maintain accurate records of reported csiaonline.org'