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On Aug. 6, 2026, the Internal Revenue Service issued updated Frequently Asked Questions concerning the new federal income tax deduction for qualified overtime compensation under the One, Big, Beautiful Bill Act.
This deduction is only available for tax years 2025 through 2028.
The FAQs supersede the previously released FAQs and provide important clarification concerning what qualifies for the deduction and employers’ payroll and reporting obligations. READ MORE
The Fair Labor Standards Act of 1938 (FLSA) set workplace norms that are still in use almost ninety years later. The FLSA established the 40-hour standard workweek and overtime protections for workers. It guaranteed pay at a rate of 1.5 times the standard hourly wage for work past the 40-hour mark. Overtime protections were designed as a safeguard for workers—to prevent employers from overworking employees and to require firms to pay workers fairly for their labor when they put in extra time on the job. By making long hours more expensive, the overtime premium incentivizes employers to hire more workers and spread the work around.
But as the country’s workforce has shifted over the nearly 90 years since the FLSA was enacted, the FLSA’s overtime rate has not. READ MORE
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