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IRS Confirms 2025 Withholding & Reporting Will Stay the Same

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What’s New with the One Big Beautiful Bill Act — and What’s Not

The “One Big Beautiful Bill Act” (H.R.1) has made headlines for its potential to reshape payroll taxes and reporting. But if you’re wondering how it affects your business for the upcoming year, here’s some welcome news: for Tax Year 2025, much will look exactly the same.

The IRS recently confirmed that Form W-2, current Forms 1099, and Form 941 will remain unchanged for 2025. Likewise, federal income tax withholding tables will not be updated. Employers and payroll providers can continue following the same procedures they’ve been using.

 

Why the Delay in Big Changes?

Updating tax rules and reporting requirements isn’t something that happens overnight. The IRS is taking extra time to prepare updated forms, software guidance, and resources — and to work closely with payroll providers like Candoor to make sure everything transitions smoothly.

One of the most notable provisions — changes to how tips and overtime pay are taxed and reported — will take effect in Tax Year 2026, not 2025.

 

What to Expect in 2026

While 2025 is business as usual, the following year is likely to bring more noticeable updates. The IRS has indicated it will:

  • Roll out revised forms and reporting instructions
  • Adjust processes for how tips and overtime are recorded
  • Provide additional guidance to employers well before changes take effect

How to Stay Prepared

Even if nothing changes for 2025, now is the perfect time to make sure your payroll processes are in good shape:

  • Review your current reporting workflows
  • Ensure your payroll and HR systems are up to date
  • Stay connected with your payroll provider for timely updates

At Candoor, we’ll keep tracking new developments and make sure you have the information you need — before you need it.

 

Disclaimer: This information is provided for general informational purposes only and should not be considered legal, tax, or investment advice. It may not reflect the most current legal or regulatory developments. We make no warranties as to the accuracy or completeness of the information provided. For advice specific to your business or situation, consult with a qualified attorney, tax professional, or financial advisor.