The Internal Revenue Service (IRS), in Notice 2025-69, has issued more guidance on the tax deduction for qualified overtime (OT). Even with this Notice, though, official guidance—especially for tax year 2025—is still skimpy. In the meantime, experts offer important clarifications that will be helpful to employers with employees who may qualify for the tax deduction.

On December 3, the Joint Committee on Tax (JCT) released its annual “tax expenditure report.” The report lists tax code provisions that lessen (or decrease) tax revenue paid to the federal government because they are departures from the usual rule, which is the foundation of the current income tax scheme, that all income is subject to tax.

In Notice 2025-67, the IRS announced inflation-adjusted limits for 2026 for retirement savings plans. The adjustments reflect the indexing of these limits that is required by law. They are effective as of January 1, 2026. They are:

NAIFA’s Policy Director Roger Moore attended the 2025 Annual Meeting of the National Conference of Insurance Legislators (NCOIL) on November 12-15, where he had the opportunity to strengthen NAIFA’s relationships with state legislators, regulators, and industry trade partners as well as advocate for key legislative priorities affecting NAIFA’s members. The meeting drew a record 414 registrations, including 74 legislators from 33 states, 13 first-time legislators from ten states, five insurance commissioners, and representatives from more than a dozen insurance departments.

During the 2025 Fall National Association of Insurance Commissioners meeting, President-Elect Christopher Gandy discussed hybrid life insurance policies with long-term care, extended care, and critical care riders, providing his perspective as an agent to the Task Force. Gandy provided insight on what he’s seeing in the market and offered suggestions to regulators to ensure the products remain accessible and easily understandable to consumers.

On Wednesday November 12 President Trump signed into law a Senate-passed agreement that was approved by the House that reopened the federal government. The agreement guarantees a Senate vote by mid-December on extending the Affordable Care Act enhanced premium tax credits (PTCs), funds about 10 percent of the government for all of FY 2026, funds the remaining 90 percent of federal government discretionary activity at FY 2025 levels until January 30, reverses reductions in force (RIFs) done on or after October 1 and forbids further government layoffs through January 30. The National Flood Insurance Program (NFIP) is reauthorized until January 30, 2026, and is reauthorized retroactively to October 1, 2025.

Representatives of NAIFA’s Medicare Collective, an initiative of the Lifetime Healthcare Center, met with officials from the Centers for Medicare and Medicaid Services (CMS) to discuss the role of brokers and agents in providing vital guidance, services, and protections to consumers in the Medicare space. They presented the Collective’s plan to work with CMS and insurance carriers to ensure Medicare beneficiaries receive the best possible coverage and care in these challenging times. They also addressed rising concerns that the failure to adequately compensate agents for their work would harm consumers by leaving them vulnerable to misinformation or without competent, personalized assistance as they navigate complex coverage options, plans, and regulations.

Republican lawmakers in both the House and the Senate have begun work on a health package for Congress to consider after the federal government reopens. President Trump said the effort should also include Democrats, saying a “much better than Obamacare” law can be developed.

Treasury’s assistant secretary for tax policy, Ken Kies, said agency lawyers are working on the regulations needed to implement the new tax law. Soon to come out will be regs on overtime, tips, car loan interest, seniors, accelerated depreciation, and Trump savings accounts, he said.

Workers who receive qualified overtime pay in 2025 are entitled to an up to $12,500/individual tax deduction if they earn less than $150,000. That means employers have to track and report qualified overtime pay. New guidance on how to do that is expected, but current guidance is limited.

On September 30, the Department of Labor (DOL) released an opinion letter on how to calculate required overtime pay. Generally, the opinion letter notes that an employee’s overtime pay calculation is not restricted to base hourly wages. Rather, it must include all compensation paid to a worker, including in this case emergency pay premiums.

Inflation-adjusted tax deductions for premiums for qualified long-term care insurance have been announced. The deductions vary by age but generally the inflation adjustments increase the deduction by about 3 percent.

For premiums paid for long-term care insurance to be deductible, the insurance has to meet statutory qualification requirements, including consumer protections. Those requirements did not change. The premiums must also exceed 7.5 percent of the taxpayer’s adjusted gross income.

On October 29, the federal health insurance marketplace website, healthcare.gov, posted the health insurance rates for exchange-based health (Affordable Care Act, or ACA) coverage in 2026. Open enrollment for exchange-based insurance started November 1. Open enrollment runs through January 15, 2026.

The Internal Revenue Service (IRS) has released draft instructions for Affordable Care Act (ACA)-required reporting of offers of employee health insurance coverage and employee enrollment in health insurance coverage. The instructions will be for Forms 1094-C and 1095-C.

The Internal Revenue Service (IRS) has released guidance on how to report third-party transactions. The reporting thresholds increased via a provision in the spending/tax cuts law enacted this past July. The new transaction thresholds are 200 transactions in a year and/or transactions that exceed $20,000. The previous threshold was any transaction that exceeded $600.

On October 22 the Internal Revenue Service (IRS) released guidance in the form of frequently-asked questions (FAQs) on the new Employee Retention Tax Credit (ERTC) compliance provisions. The new compliance provisions were enacted last summer in the tax/spending cuts reconciliation bill that was signed into law on July 4.

Ballot initiatives approved by Texas voters on November 4 banned the imposition of state estate and inheritance taxes, and tax on unrealized capital gains. Proposition 8, the measure that bans estate/inheritance taxes, was a constitutional amendment. Proposition 2, also a constitutional amendment, forbids imposition of tax on gains in the value of capital assets when those gains have not been realized (the asset sold).

Congress failed to reach an agreement on a short-term patch to fund the government by September 30, the start of the new fiscal year (FY 2026). As a result, as of October 1, large swaths of the federal government are closed. The shutdown impacts federal agencies and programs that are funded through the annual appropriations process (discretionary spending). So, programs and agencies that operate under mandatory spending, or through fees or advance-year appropriations can and will keep operating during the shutdown.

The ongoing government shutdown has already begun to have an adverse impact on the National Flood Insurance Program (NFIP). Both authorization and funding for the NFIP expired on September 30, the end of fiscal year (FY) 2025.

The currently-pending (and now multiple times defeated) continuing resolutions (CRs) would extend authorization and funding for the NFIP, but until a CR (or, more unlikely, an actual funding bill) is enacted, the NFIP is stopped in its tracks.

Pending regulatory initiatives on such issues as the fiduciary rule, worker classification, noncompete agreements, and the white-collar exception to overtime rules could be delayed due to the government shutdown, and/or to budget cuts that might be imposed by Congress.