Navigating the “No Tax on Overtime” Rule: What Payroll Professionals Must Know

Marketing and Empathy Psychology

By - Christine Stolpe

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A major change in federal tax law is reshaping how employees may treat overtime pay on their tax returns. The One Big Beautiful Bill Act, signed July 4, 2025, introduced “No Tax on Overtime”—a new federal income tax deduction for qualified overtime compensation for tax years 2025–2028.

For payroll teams, the headline is only the beginning. This rule introduces new operational questions around what counts as “qualified” overtime (it’s narrower than many people assume), how income phase-outs work, how to support accurate employee reporting, and what to plan for regarding W-2 reporting as guidance evolves.

In this implementation-focused session, Christine Stolpe will break down the new deduction, clarify eligibility and thresholds, and walk through practical steps payroll departments and service providers can take to prepare—without disruption at year-end.

Topics Covered:

What “No Tax on Overtime” actually means (and what it doesn’t)
Defining qualified overtime compensation and how it’s calculated under the law
Deduction limits and phase-outs (including key income thresholds)
How the deduction interacts with Social Security and Medicare withholding (and why “tax-free” is a misleading label)
Practical payroll readiness: earnings codes, tracking, documentation, and process updates
Year-end considerations and W-2 reporting planning, including current transition notes for 2025 and what to watch for next
Employee and leadership communications: setting expectations and reducing filing confusion

Benefits of Attending:

Understand who qualifies and how the overtime deduction is applied
Identify wage/income phase-out rules that impact eligibility
Learn what payroll must do now vs. what may change as reporting guidance develops
Build a clear communication plan to help employees use the benefit correctly

This timely webinar gives payroll professionals the clarity and tools to stay compliant, reduce employee confusion, and confidently operationalize one of the most impactful wage-related tax changes in recent years.

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Webinar Type

Clear

Speaker Detail

Passionate about furthering an understanding of payroll, Christine Stolpe, CPP, has been working in some fashion of payroll for the past 30 years and enjoys watching the profession blossom through emotional intelligence and personal fortitude. In 2019, she opened her own payroll consulting business, Wages Creek. A member of the Payroll Organization (PAYO) since 2011, she serves on the Social Networking Committee, Government Relations Task Force – State & Local Tax Sub-Committee, SPLTF-Best Practices Sub-Committee, and Certification Item Development Task Force. In the past, she has served on the Board of Directors for the California Payroll Conference (CPC) and Silicon Valley Chapter (SVAPA), as well as serving a two-year term as Advisor for Region 4 to the Board of Directors. Christine was very proud to be one of the first fifty individuals to earn the Global Payroll Management Certification in September 2011. Through furthering her own education and skill sets by attending educational offerings, Christine has developed a ravenous appetite for helping others. She has developed training for other payroll professionals, volunteered for National Money Matters Day during National Payroll Week, and now looks forward to continuing to grow her network of professional resources, colleagues, and friends through various public speaking engagements.