Treasury Department enacting OBBBA tax breaks for tips and overtime

The Republican tax reform law signed by President Donald Trump in the law earlier this month is in the process of implementation, including the provisions that provide tax exemption for workers who receive advice and additional work.

Trump signed the one beautiful bill (OBBA) in the law on July 4, which extended a variety of tax cuts that are scheduled to end at the end of this year and create some new tax exemptions. Among these provisions related to oblique income and additional work after the president presented “there is no tax on advice” and “the absence of a tax on additional work” is an advantage in his economic campaign platform.

The Ministry of Treasury and the Tax Authority update tax collection operations to calculate the new provisions, which have effects on taxpayers who may be able to claim these deductions for the current tax year. OBBA creates a discount of up to $ 25,000 for qualified advice that important workers have received. Additional action ruling is organized as a discount for income over the line for additional work installments of up to $ 12,500 for workers per hour.

Treasury Deputy Minister of Michael Volumekandar, who held the position of Acting Commissioner of the Tax Authority for this year, spoke with Fox Business about the implementation of these policies and how the agency worked with Congress during the legislative process to ensure that the provisions of the law are applicable.

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“One of the issues that Congress delegated in the cabinet to work with it is the sectors where the oblique income was a common component of compensation before 2025,” explained by Volflekander.

The Treasury uses historical data for analyzing industries and professions that will be eligible for the opponent. Volgander said that this process is one of the “large elevators” that started before the bill reached the president’s office, noting that it is expected that the process of setting the rules will be submitted soon.

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“We hope to start a notice of issuing proposed rules in the very near future, which provides a kind of guidance for taxpayers in relation to the sectors that we are likely to include and that are covered by this opponent for oblique income. Then, if there are industries that we missed during the regular suspension period in setting the rules, we may be able to fill in.”

Volgander pointed out that there is some ambiguity on social media about whether all the tips paid in criticism will be covered due to the reference to “monetary advice” in the legislation. However, he said that the payment method will not affect eligibility to deduct oblique income.

“If there are any distortions about this, this depends on how to pay you if it is in the currency for a credit card fee. There is no difference when it comes to eligibility according to this ruling,” said Volgander.

President Donald Trump signed the law of one beautiful law in the White House on Independence Day, July 4, 2025. (Tom Brenner Luashnton Post via Getti Imachurs / Getty Em.

He said that the additional work is “a little more clear” for implementation, although the current tax year that is completed in the middle of the road means that agencies need to calculate the fact that employers and taxpayers were not representing these changes before the draft law became a law.

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parliament Speaker Mike Johnson celebrates LR. (Kevin Lietsch / Getty Images / Getty Images)

The deputy minister said that the Ministry of Treasury and the Tax Authority started work through the implementation process, as Congress was making the bill instead of waiting for its signing in the law.

“Once we have a language outside the home and the means for the reconciliation law, we started to determine all the steps that we will have to take to implement. Therefore, we are well -working in terms of determining each form, every process, all instructions need to be modified.”

Volgander said that the process that plays alongside legislators to draft legislation was important “because we are doing negotiations, we also want to make sure that we understand it will be possible.

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It does not indicate that Congress will not pass a law that will not be implemented, and for this reason we wanted – as soon as we have a text – we sat with our operations with the Tax Authority and said, “What will you take to implement this? Are there technical reforms that we need to be implemented? “That is why it begins early.”