Taxpayers who receive tip income, overtime pay, and make car loan payments with interest will have relief from 2025 through 2028, thanks to President Trump’s Big Beautiful Bill Act.
Individuals can earn up to $25,000 in qualified tips and up to $12,500 in qualified overtime without that income being subject to income tax, but their employers will have to submit information returns to the IRS to report this income. Employers can expect guidance later in the year and relief provisions for the transition for tax year 2025.
Taxpayers with auto loans that qualify can deduct up to $10,000 in some instances for interest payments. A qualified vehicle is a new car, minivan, van, SUV, pick-up truck, or motorcycle with a gross vehicle weight rating of less than 14,000 pounds and that has undergone final assembly in the United States. Lenders will have to submit information returns to the IRS reporting the interest payments; guidance is forthcoming.
To read the full IRS report, click here.
