The Internal Revenue Service (IRS) has officially announced that standard tax forms and withholding tables will remain unchanged for the 2025 tax year, despite the recent enactment of the One Big, Beautiful Bill Act signed into law by President Donald Trump on July 4, 2025. The federal agency stated that all employers and payroll providers should continue using existing procedures through the end of the year.
According to The US Sun, this decision is part of a phased implementation strategy intended to avoid disruption during the filing season. The IRS will begin rolling out adjustments and updated forms starting in 2026.
Withholding Procedures Remain Unchanged
According to the IRS, taxpayers and employers should continue using current forms and procedures when filing income earned between January 1 and December 31, 2025. This includes Form W-2, Forms 1099, Form 941, and all standard payroll return documents.
The agency has confirmed that federal income tax withholding tables will also not be updated this year. Employers and payroll providers are directed to maintain current reporting protocols throughout 2025. These measures are intended to reduce disruption during the upcoming filing season and to allow businesses, the IRS, and tax professionals adequate time to adjust to the incoming legislative changes.
Transition to New Legislation Begins
While the One Big, Beautiful Bill Act has been signed into law, the IRS emphasized that its implementation will occur gradually. Full integration of the law’s provisions, including updates to forms and withholding tables, is planned for the 2026 tax year.
The IRS is currently developing revised guidance and documents to reflect the new law. Among the planned updates are modifications to how tips and overtime pay are reported. The agency stated it would work closely with payroll providers and tax professionals to ensure a smooth transition.
New Tax Credits Take Effect in 2025
Although withholding procedures remain unchanged, some components of the new legislation will still apply in the 2025 tax year. Most notably, the law increases the child tax credit from $2,000 to $2,200 per qualifying child. This amount will be adjusted annually for inflation beginning in 2026.
The refundable portion of the child tax credit is set at $1,400. To be eligible, both the parent and the child must have a valid work-eligible Social Security Number.
The increase in the child tax credit is part of the law’s effort to permanently extend several provisions of the Tax Cuts and Jobs Act (TCJA) originally passed in 2017.
Mixed Financial Effects Beyond Tax Credits
While the new law offers additional tax relief for some families, other impacts may offset these gains. According to projections, the legislation could lead to an average increase of $130 in annual electricity bills per household in at least one U.S. state.
Meanwhile, a $1,000 state-level tax credit has also been announced in one jurisdiction, designed to further support family budgets. Details on eligibility and implementation for this local measure are expected in the coming months.
The IRS has clarified that more information will be released in phases throughout the year, including how taxpayers can claim benefits related to the One Big, Beautiful Bill Act on their returns. All upcoming changes are set to begin with the 2026 tax year, giving households and employers a full year to prepare.
This phased approach aims to maintain stability while introducing one of the most significant tax reforms since 2017.
