The Internal Revenue Service (IRS) will not adjust current income-tax withholding levels for workers and employers for tax year 2025 as a result of the One Big Beautiful Bill Act, including Forms W-2, 1099, and 941, to “avoid disruptions during the tax filing season and to give the IRS, business and tax professionals enough time to implement the changes effectively.” The decision delays savings from the reconciliation bill for most taxpayers and “will enlarge refunds paid out to taxpayers early next year, ahead of the congressional elections in November 2026.” The IRS notes that it is working on new guidance and updated forms for tax year 2026, including changes to how tips and overtime pay are reported.
