Hello Everyone,
We are seeing service request from customers wanting to know how and when Oracle going to address the no federal tax on overtime and tips?
Is Oracle going to address the no federal tax on overtime and tips as per New Act?

“No Tax on Overtime”
New deduction: Effective for 2025 through 2028, individuals who receive qualified overtime compensation may deduct the pay that exceeds their regular rate of pay – such as the “half” portion of “time-and-a-half” compensation -- that is required by the Fair Labor Standards Act (FLSA) and that is reported on a Form W-2, Form 1099, or other specified statement furnished to the individual.
Maximum annual deduction is $12,500 ($25,000 for joint filers).
Deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).

We need to implement changes related new OBBBA bill where exempt the premium portion of overtime from federal income tax. and only the premium portion of overtime (the half-time) will not be federally taxed.
Need Input from Oracle about which changes will be added as part of tax update for this law and where we can see release dates and changes schedule related to these changes.

Answer:

Below is the blurb that Anne Leung added to the PNA newsletter that was sent to the customers.

"One Big Beautiful Bill Act

PeopleSoft will await guidance from the IRS regarding the One Big Beautiful Bill Act for overtime and tips before determining the required actions for our product. "

https://questoraclecommunity.org/learn/blogs/peoplesoft-payroll-for-north-america-newsletter-may-june-2025/
Please feel free to forward the newsletter to your colleagues using PeopleSoft Payroll for North America. If you received this newsletter from a friend or colleague and would like to receive it, send me an email at anne.leung@oracle.com with NEWSLETTER in the subject, and you will be added to our distribution list.

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“There is no bug at this time. A bug will be created only if/when it is confirmed that product modifications will be needed to enbable employers to comply with any new IRS requirements. The answer to this question will be known only after the IRS announces what specific actions employers will be required to take with regard to the recently enacted legislation.”

Regards,
Asif M -Oracle