New 2026 federal tax rules for tips, overtime, seniors
A FOX 9 guide outlines how President Donald Trump's 2025 One Big Beautiful Bill Act changes 2025 federal income tax filing for 2026, including temporary deductions that can effectively shield up to $25,000 in tips and $12,500 in overtime pay ($25,000 for joint filers), a new $6,000 senior deduction for qualifying older adults, and deductibility of up to $10,000 in car-loan interest on U.S.-assembled vehicles. The law also raises the Child Tax Credit from $2,000 to $2,200 per child and ends the IRS Direct File pilot for 2026, meaning Twin Cities filers must use other e-file or paid-prep options by the April 15, 2026 deadline.
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📊 Relevant Data
Tipped workers are more likely to be people of color, women, women of color, or single parents, and are disproportionately born outside the United States. ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/)) ([Economic Policy Institute](https://www.epi.org/publication/rooted-racism-tipping/))
Tipping is a racist relic and a modern tool of economic oppression in America — Economic Policy Institute
Women represented more than 71 percent of tipped workers nationally in June 2024, despite representing 47 percent of the labor force. ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states)) ([Tax Policy Center](https://taxpolicycenter.org/taxvox/tipped-workers-their-income-taxes-and-states))
Tipped Workers, Their Income Taxes, and States — Tax Policy Center
Latinas are overrepresented among tipped workers: despite accounting for 7.9% of the total U.S. workforce, they represent 12.9% of the tipped workforce. ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html)) ([El País](https://english.elpais.com/usa/2024-06-13/black-latina-and-native-women-are-the-tipped-workers-most-exposed-to-poverty.html))
Black, Latina and Native women are the tipped workers most exposed to poverty — El País
Younger workers are putting in more hours of unpaid overtime by starting early or staying late and working over breaks and lunchtimes than their older counterparts. ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf)) ([ADP Research](https://www.adpresearch.com/wp-content/uploads/2023/04/People-at-Work-2023_A-Global-Workforce-View.pdf))
People at Work 2023: A Global Workforce View — ADP Research
In 2022, half of all Hispanics age 65 and older received less than $19,660 in yearly income, contrasted with $32,150 for whites. ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/)) ([Pension Rights Center](https://pensionrights.org/resource/income-received-by-different-groups/))
Income Received By Different Groups — Pension Rights Center
Black workers ages 51 to 64 are the least likely among all racial and ethnic groups to have a retirement account, according to a July 2023 report. ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/)) ([AARP](https://www.aarp.org/money/retirement/racial-savings-wealth-gap/))
In 2023, nearly half (46 percent) of Black children, 1 in 3 Latino and American Indian and Alaska Native children, about 1 in 6 white and 1 in 8 Asian children were in poverty. ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage)) ([Center on Budget and Policy Priorities](https://www.cbpp.org/press/statements/record-rise-in-poverty-highlights-importance-of-child-tax-credit-health-coverage))
Record Rise in Poverty Highlights Importance of Child Tax Credit — Center on Budget and Policy Priorities
📌 Key Facts
- For tax years 2025–2028, workers can deduct up to $25,000 in tips from taxable income, phasing out above $150,000 in modified AGI and limited to Treasury‑listed occupations.
- Workers can deduct up to $12,500 in overtime pay ($25,000 on a joint return), with the deduction likewise reduced above $150,000 in income and requiring a Social Security number on the return.
- Seniors age 65+ with income at or below $75,000 get an additional $6,000 deduction, and individuals may deduct up to $10,000 in interest on loans used to buy U.S.-assembled vehicles between 2025 and 2028.
- The Child Tax Credit increases from $2,000 to $2,200 per qualifying child under the new law.
- The IRS Direct File free online filing system will not be available for the 2026 filing season, and the standard federal filing deadline is April 15, 2026.
📰 Source Timeline (1)
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