On August 7, 2025, the U.S. Internal Revenue Service (the “IRS”) announced that there will be no changes to information returns or withholding tables for the tax year 2025 in relation to the One Big Beautiful Bill Act (the “Act”), which was signed into law on July 4, 2025.1
WHY THIS MATTERS
Form W-2, Forms 1099, and Form 941, and payroll returns will remain unchanged for 2025. As a result, employers and payroll providers may continue using current procedures for reporting and withholding without any immediate adjustments.
The delay in implementing changes introduced by the Act provides additional time for employers and payroll providers to update their payroll systems, minimizing disruptions during tax filing season. The IRS is currently working on new guidance and updated forms, which are expected to be implemented for the 2026 tax year.
KPMG INSIGHTS
As reported in GMS Flash Alert 2025-131, the Act permanently extends and modifies key individual tax provisions of the 2017 Tax Cuts and Jobs Act, which were set to expire end of this year. With many of the provisions taking effect in 2025, individual taxpayers are likely to receive larger refunds when filing their 2025 tax returns. The changes effective in 2025 include an increase in the standard deduction and the SALT deduction, an enhanced child tax credit, a new auto loan interest deduction, and a deduction for tips and overtime earnings.
FOOTNOTE:
1 P.L. 119-21 (July 4, 2025). For the full text of the bill signed by the president, see “One Big Beautiful Bill” legislation, H.R. 1.
Contacts
Disclaimer
The above information is not intended to be “written advice concerning one or more federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.
The information contained in this newsletter was submitted by the KPMG International member firm in the United States.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2025 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.