Tax insight

Employer-provided benefits and employer tax credits addressed in the One Big Beautiful Bill Act

Insight
8 minute read
July 29, 2025

What happened?

Public Law No: 119-21, the “One Big Beautiful Bill Act” (the Act), signed into law on July 4, includes several tax provisions related to employer-provided benefits and employer tax credits.

Why is it relevant?

A number of provisions in the Act impact the tax treatment of benefits typically provided by employers to employees. These include wage exclusions or inclusions for miscellaneous fringe benefits, employer business credits, employer payroll tax credits, and certain arrangements an employer may include in its group health high-deductible health plan. These changes present an opportunity to review existing arrangements as part of the overall compensation and benefits strategy.

Actions to consider

Employers should consider the impact of the various provisions in the Act on benefits the employer currently offers, and whether plans or programs and related administration, including payroll, require updates to reflect the changes. In the case of employer tax credits, employers should review the requirements to determine if any actions must be taken prior to the tax year the credit could be elected.

Because some of the provisions apply retroactively while others require revision or implementation prior to the applicable tax year to address compliance or eligibility, the applicable effective date should be kept in mind. Employers also will want to assess existing guidance and monitor developments in guidance from Treasury and the IRS.