WASHINGTON, D.C. — The Department of the Treasury and the IRS this past week released two sets of sweeping tax guidance that could reshape financial planning for rural lenders, tipped workers, and millions of Americans who receive overtime — marking one of the most expansive overhauls tied to the One, Big, Beautiful Bill.
The first guidance, Notice 2025-71, outlines how lenders can claim a new tax benefit allowing them to exclude 25 percent of interest income from loans secured by rural or agricultural real estate. Officials said the interim rules define what qualifies as rural or agricultural property, explain refinancing rules, and provide clarity until full regulations are drafted. Public comments are being accepted through the Federal Register.
A separate notice, 2025-69, focuses on taxpayers who rely on tipped income or overtime pay. For the 6 million Americans who report tips, the IRS clarified how workers may calculate the new tip deduction — up to $25,000 annually — even if tip amounts do not appear separately on W-2s or 1099s. The agency offered detailed scenarios involving servers, bartenders, and self-employed workers to demonstrate how qualified tips should be calculated, including when unreported tips and logs do or do not count.
The overtime guidance delivers another major benefit: workers may deduct the portion of overtime pay that reflects the FLSA-required “half” premium. The deduction caps at $12,500 per year — $25,000 for joint filers — and phases out for higher-income earners. The IRS included examples for workers paid double-time, public safety employees on 14-day work periods, and government workers earning compensatory time.
Officials emphasized that neither notice changes an employer’s obligations under the Fair Labor Standards Act. Instead, the new tax rules supplement existing wage laws and aim to simplify reporting during the IRS’s transition period before updated forms are released for the 2025 filing season.
The IRS said it will continue to update taxpayers as additional elements of the One, Big, Beautiful Bill are implemented.
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