NEW PORTAL REQUIRED FOR BUSINESSES RESPONSIBLE FOR COLLECTING FLORIDA SALES TAX

Beginning December 1, 2025 businesses responsible for collecting the Florida state sales tax must use a new portal from the Department of Revenue to report and remit their monthly sales tax.

Businesses can access the new system at floridarevenue.com/taxes/filepay. Select Sales and Use Tax under the eFile and Pay Taxes and Fees section. The new system should automatically load your user profile information. Use your current login information to access the new system; your saved credentials will be in the system but will not automatically appear.

The old web address for filing and reporting Florida sales tax will remain active for one to two months to allow businesses to view and download their prior tax filings.

This new portal is only for businesses that are required to file their sales tax return and remit the tax due electronically. If your business does not collect enough sales tax to meet the electronic filing and payment thresholds, this change will not affect you. You can still file your sales tax return and pay the tax due the same way you have been doing it.

IRS RELEASES GUIDANCE ON “NOTAX ON TIPS/NO TAX ON OVERTIME” LAW

The IRS has released new guidance for taxpayers to claim deductions for qualified tips and qualified overtime pay under the new “No Tax on Tips/No Tax on Overtime” law. Please refer to the July and October editions of this newsletter for specifics about the new law.

Specifics on “No Tax on Tips”: As a reminder, tipped employees can deduct up to $25,000 in “qualified” tips they received in calendar year 2025 on their federal income tax return and pay no tax on them. Only voluntary tips qualify for the deduction. Service changes, automatic gratuities, and other mandatory charges added to a customer’s bill do not qualify for the deduction.

To claim the tax deduction, the employee’s job must be one of the 68 occupations identified by the IRS as customarily receiving tips, like wait staff, bartenders, dishwashers, and cooks.

For 2025, employers may provide the employee’s occupation in box 14 of the employee’s W-2 form. (This will be mandatory for 2026.)

The employee may only deduct the amount of “qualified” tips they receive, and only tips given voluntarily qualify for the deduction. So, employers must separately track and report the employee’s “qualified” tips on the employee’s yearly W-2 form because employees may only deduct the amount reported on their W-2. However, the IRS is not updating the W-2 to facilitate this reporting for calendar year 2025. (A new W-2 version will be released in 2026.)

Instead, the IRS advises employers with tipped employees that if they choose to report the amount of an employee’s cash tips in box 14 of the employee’s W-2 or on a separate statement, the employee may use that amount to deduct from their income taxes.

Otherwise, the employee may determine their qualified tips for calendar year 2025 by referring to the social security tips reported in box 7 of the Form W-2 and the tips reported by the employee on Form 4070 (Employee’s Report of Tips to Employer) or a similar substitute form.

Specifics on “No tax on Overtime”: As a reminder, employees can deduct some of the overtime pay they received in 2025 on their income tax return and pay no tax on it. The deduction only applies to overtime that is required under the Fair Labor Standards Act, and only applies to the portion of an employee’s overtime pay that is greater than their normal hourly rate. Overtime pay is time and a half an employee’s regular pay, and this new tax deduction only applies to the extra “half.”

The IRS encourages employers to provide employees with a statement of their qualified overtime pay for calendar year 2025. Remember, this number will only be the extra “half” of the overtime pay and will be smaller than the total amount of overtime pay.

If an employer provides this information either in box 14 of the employee’s W-2 form or in a separate statement, the employee can use that information to claim their tax deduction on their federal income tax return. If the employer does not provide this information, the employee can determine their qualified overtime pay using their time sheets or paychecks.

Overall Reminders for Employers: Employers should remember that both tips and overtime are still wages subject to income tax withholding, Social Security and Medicare taxes, and state and local taxes (if applicable). Employees are still responsible for determining if they qualify to take one of these new deductions and for claiming the deduction on their own income tax return.

This new law imposes a new obligation on employers to report amounts of “qualified” tips and “qualified” overtime pay to their employees. While the IRS is not requiring employers to strictly comply with these reporting requirements this year, employers should consider letting their employees know if/when they will provide each employee’s qualifying occupation (for tipped employees), amount of qualified tips, and amount of qualified overtime received in calendar year 2025. Employees will need this information before they can file their own federal income tax returns.

These reporting obligations for employers become mandatory in 2026, and employers will need to be able to accurately track these items. The IRS will assess penalties on employers who fail to report these items for 2026.

RATES FOR WORKERS’ COMPENSATION INSURANCE WILL DECREASE AGAIN FOR 2026 IN FLORIDA

The price that insurance companies can charge for workers’ compensation insurance is set by the State of Florida each year. For 2026, the state has ordered a mandatory 6.9% reduction in workers’ compensation rates. The new rates will be applied to workers’ comp insurance policies as they renew in 2026.

Please note: The -6.9% decrease is an average over the hundreds of different industry classifications. The specific rates for an individual company’s policy may decrease more or less than this amount.