Treasury and the IRS are providing guidance offering penalty relief to employers and other payors for tax year 2025. about new information reporting requirements for cash tips and qualified overtime compensation. This guidance could impact businesses with employees and individual clients who receive tips or overtime compensation.

Notice 2025-62 provides penalty relief from the new information reporting requirements to employers and other payors for not filing correct information returns and not providing correct payee statements to employees and other payees.

Employers and other payors will not be penalized for failing to separately report amounts reasonably designated as cash tips or the occupation of the person receiving those tips. Additionally, they won’t be penalized for failing to separately report the total qualified overtime compensation.

This relief applies only to returns and statements filed for tax year 2025 and only if the filer submits a complete and accurate return or statement.

For more information, see the One, Big, Beautiful Bill provisions page on IRS.gov.