The IRS has released important guidance for individuals who received tips or overtime during the tax year, outlining how to claim deductions under the ‘No Tax on Tips’ and ‘No Tax on Overtime’ provisions. While many workers could benefit from these tax breaks, some states, including Illinois and Georgia, are opting out of the federal tax cuts, potentially complicating tax returns for residents. An emergency bill in Washington D.C. is also poised to impact these deductions, likely affecting services workers significantly. The IRS clarifies these nuances, encouraging all eligible workers to understand the specific rules applicable in their states, especially in light of the recent updates on allowable deductions and exemptions.