As a reminder for all employers with employees in the United States, on August 7, 2025, the Internal Revenue Service announced that it will not make changes to certain information returns or federal income tax withholding tables for Tax Year (TY) 2025, despite the enactment of the One Big Beautiful Bill Act (OBBBA).

Highlights for TY 2025:

• Form W-2, existing Forms 1099, Form 941, and other payroll return forms will remain unchanged.
• Federal income tax withholding tables will not be updated to reflect OBBBA provisions.
• Employers and payroll providers should continue using current procedures for reporting and withholding.

These decisions are intended to:

• Avoid disruptions during the tax filing season.
• Provide the IRS, businesses, and tax professionals with sufficient time to implement the changes effectively.

The IRS also stated that it is developing new guidance and updated forms for TY 2026, including how to report tips and overtime pay under the new law: as part of this phased implementation, the IRS has released draft versions of Forms W-2 and W-4 for TY 2026, which introduce new reporting elements related to OBBBA provisions.

For additional information:

• IRS announces no changes to individual information returns or withholding tables for 2025 under the One, Big, Beautiful Bill Act (IR-2025-82)
• IRS – One, Big, Beautiful Bill Act of 2025 Provisions

What is a Per Diem Rate? A per diem rate is a daily allowance for business travel expenses, combining:

• Lodging
• Meals and Incidental Expenses (M&IE)

These rates vary by location and can be used instead of detailed receipts, provided the allowance does not exceed the federal rate.

Highlights for FY 2026:

• Standard CONUS Rate:
  • Lodging: $110
  • M&IE: $68
  • Total: $178 per day

• Non-Standard Areas (NSAs):
  • M&IE tiers: $68 to $92
  • Combined rates: $178 to $575, depending on location and season

• No new NSA locations were added.

Employer Considerations:

• How to Find Rates: Use the GSA Per Diem Lookup Tool for specific locations. The site also provides links to Department of Defense and State Department rates for OCONUS and foreign travel: GSA – Per Diem Rates

• If per diem rates are insufficient, agencies may authorize actual expense reimbursement up to 300% of the applicable rate under federal travel regulations.

For additional information:

• GSA – Per Diem Bulletin FTR 26-01
• Federal Register – GSA 08/19/2025 – Maximum Per Diem Reimbursement Rates for the Continental United States (CONUS)
• GSA – Per Diem Rates

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