H.R. 1, also known as the One Big Beautiful Bill Act, includes changes relevant to employers for payroll, employee benefits and more.
Dan Lewis, ADP vice president of compliance programs and government affairs, shares key changes that may affect employers and taxpayers.
For more, please visit ADP.com/EyeOnWashington
Transcript:
H.R. 1, which is commonly referred to as the “One Big Beautiful Bill Act”, is a significant federal tax and spending bill, which was signed into law just on July 4th. Looking at this new law from a high level. It includes several significant changes relevant to employers for payroll, employment tax and employee benefits. Among other potential business impacts, the act effects income and employment taxes.
Among other things, it permanently adopts changes to federal tax rates and standard deduction amounts that have been in effect since 2018. It increases the standard deduction for the 2025 tax year with inflation adjustments in the future, and it creates a new tax deduction for qualified overtime and qualified tips retroactive to January 1st, 2025 and continuing through 2028.
In addition, in terms of tax credits, the act allows businesses to immediately deduct domestic R&D spend that started after December 31st, 2024, and small businesses maybe permitted to retroactively apply the immediate expensing to earlier tax years. This is just a short list of key provisions, and there are many other provisions within the extensive new law.
We expect more guidance in the weeks and months ahead. The Department of Treasury and the IRS are expected to issue updates to clarify how these changes will be implemented. In the meantime, ADP is closely monitoring these and all legislative and regulatory developments that are applicable to our space.
We will continue to provide updates as more details emerge, but for now, you can get a closer look at the act on our legislative page ADP.com/EyeOnWashington.
And you can also join us for an interactive webinar on July 17th at ADP.com/events, where we'll examine the new law and its potential impact on business.
