Insights

The One Big Beautiful Bill Act (the Act), signed on July 4, 2025, allows a deduction from an individual’s personal tax return on Form 1040 for “qualified overtime compensation” as defined in new Code § 225. The amount that can be deducted from the employee’s return is capped at $12,500 with the maximum then adjusted down if the employee’s AGI exceeds certain limits. This deduction is permitted in 2025.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the OBBBA) which amended a number of Internal Revenue Code provisions related to employee benefits and compensation. Although not an exhaustive list, below are the provisions we expect will have the greatest impact on compensation and benefits for mid- and larger sized employers.

Companies with employees in the Southern California area have several tax-advantageous alternatives when providing employees with disaster relief.  This alert outlines the more common relief programs available under IRS guidance.

On Monday, September 8, 2024, the United States Department of the Treasury, Department of Labor, and Department of Health and Human Services (collectively, the “Tri-Agencies”) issued a final rule (“the Final Rule”) implementing new regulations applicable to nonquantitative treatment limitations (“NQTLs”) under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (“MHPAEA”). The Final Rule codifies many of the requirements set forth in the (the “Proposed Rule”), while pulling back on some of the Tri-Agencies’ more controversial proposals. 

On Friday, June 28, 2024, the U.S. Supreme Court overruled Chevron U.S.A. v. Natural Resources Defense Council (“Chevron”)[1] in Loper Bright Enterprises v. Raimondo (No. 22-451) and Relentless v. Dep’t of Commerce (No. 22–1219)[2] (the two cases collectively referred to as “Loper Bright”), bringing an official end to the decades-old and eponymously named “Chevron deference” doctrine. Not content to stop there, the Court returned fresh to work Monday, July 1, to, in Corner Post, Inc. v. Board of Governors of the Federal Reserve System (No. 22-451)[3] (“Corner Post”), effectively extend the limitations period to challenge final agency actions under the Administrative Procedure Act (“APA”).

Last week, the IRS announced plans to begin a campaign to audit personal use of business aircraft. The audits will focus on whether large corporations, partnerships and high-and ultra-high net worth aircraft owners have properly reported their business and personal aircraft usage for tax purposes, with a particular focus on ensuring that owners are only taking deductions to which they are entitled. Given the value of an aircraft, the amount of a deduction for aircraft related expenditures on a given taxpayer’s return can be in the tens of millions of dollars, and with more than 10,000 corporate jets operating in the U.S., IRS Commissioner Daniel Werfel recognized that much is at stake with this campaign.  The audit campaign is expected to focus initially on multinational and domestic corporations and complex partnerships but is expected to expand from there.

The IRS has delayed the implementation of § 603 of the SECURE 2.0 Act (“Act”), which requires certain highly paid plan participants to make Roth (rather than pre-tax) catch-up contributions beginning in 2024.  In short, the IRS has provided an “administrative transition period” during 2024 and 2025 whereby individuals who made more than $145,000 in FICA wages during the prior year can continue to make pre-tax catch-up contributions.  This is great news for employers and those taxpayers who would have been forced into Roth catch-up contributions.

On Friday, March 10, 2023, regulators shut down Silicon Valley Bank (“SVB”) and seized its deposits, resulting in the second largest U.S. banking failure since the 2008 financial crisis. Specifically, SVB was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (the “FDIC”) was named receiver. Since the FDIC insures deposits of up to $250,000, that amount was immediately available; however, the fact that deposits above and beyond the $250,000 limit were not immediately available alarmed many. After a weekend of chaos as many businesses scrambled for a solution to the illiquid funds, on Sunday, March 12, 2023, in a joint release among the Department of Treasury, Board of Governors of the Federal Reserve System and the FDIC, Treasury Secretary Janet Yellen instructed the FDIC to guarantee SVB customers access to all deposits, including the uninsured funds. The release further stated that New York-based Signature Bank was closed by its chartering authority and that its customers would also receive access to all deposits, including the uninsured funds. While this may have provided relief to many, it is important to keep in mind the lesson and best practices in the event of such a liquidity crunch.

In response to 2021 executive orders issued by President Biden, the Department of Labor has finalized new rules relating to investment duties for employee benefit plan fiduciaries. In light of these new regulations, now is a great opportunity for employers and retirement plan sponsors to review their plans’ investment line-ups, QDIA options, and investment policy statements to determine whether changes to the plans’ investment options or strategy may be appropriate.

On November 15 in a bipartisan ceremony, President Biden signed into law H.R. 3684, the “Infrastructure Investment and Jobs Act,” (the “Infrastructure Act”).