The Internal Revenue Service (IRS) issued Notice 2025-62 granting penalty relief for tax year 2025 related to new information-reporting requirements for overtime pay under the One Big, Beautiful Bill Act (OBBBA). The notice clarifies that employers and other payors will not face penalties for failing to provide a separate accounting of qualified overtime compensation on wage statements or information returns, provided the rest of the filing is complete and accurate. The temporary relief—limited to 2025 filings—reflects the IRS’s acknowledgment that many employers lack the systems or data needed to track and report overtime at the level of detail required by the OBBBA. The agency encouraged employers to begin updating payroll systems in preparation for full compliance in future years.
