REMINDER: Small Businesses must comply with Michigan’s Earned Sick Time Act

Michigan’s Earned Sick Time Act (ESTA) took effect on February 21, 2025, expanding employee eligibility for sick time benefits. Employers with 11 or more employees should already be in full compliance. Businesses with 10 or fewer employees have until October 1, 2025 to comply.

If you are a small business, it’s important to work closely with your payroll provider to ensure compliance. For Jellison CPA payroll clients, we will be reaching out in the coming weeks with more information to help facilitate this process.

If you have any questions about the requirements, visit the Michigan Labor and Economic Opportunity site for more information and FAQs: https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/paid-medical-leave-act

New Tax Break: Deduction Available for

Tipped Workers (2025–2028)



Starting in 2025, a new federal tax deduction is available for employees and self-employed individuals who receive tips as part of their regular work.

Here’s what you need to know:

• Who qualifies?
• You may qualify if you work in an occupation the IRS deems as customarily and regularly tipped as of December 31, 2024. The IRS will publish the official list of eligible occupations by October 2, 2025.
• What tips count?
• Only qualified tips—voluntary cash or credit/debit card tips from customers (including tips shared with coworkers)—that are reported on a W-2, 1099, or Form 4137 are eligible.
• Deduction limits:
• Up to $25,000 per year
• For self-employed individuals, the deduction cannot exceed your net income (before the deduction) from the business where the tips were earned.
• Income phaseout:
• The deduction begins to phase out if your Modified Adjusted Gross Income exceeds:
• $150,000 for single filers
• $300,000 for joint filers
• Available to itemizers and non-itemizers

Who’s not eligible?

• Self-employed individuals working in a Specified Service Trade or Business (SSTB) under Section 199A (e.g., law, accounting, consulting, health, etc.)
• Employees whose employer is an SSTB
• Married taxpayers who don’t file jointly
• Taxpayers who don’t provide a Social Security Number on their return

Important reporting rules:

Employers and other payors must report qualifying tip income and the worker's occupation to the IRS or SSA, and also provide a statement to the recipient.

New Overtime Tax Deduction Available for (2025–2028)



Starting in 2025, workers who earn overtime pay may be eligible for a new federal income tax deduction. This temporary provision can help reduce your taxable income if you’re paid for working more than 40 hours per week.

What’s Covered?

The deduction applies to the “overtime premium”—the extra pay above your regular rate that’s required under the Fair Labor Standards Act (FLSA). For example, under “time-and-a-half” pay, the “half” portion is considered the qualified amount.

To qualify, the overtime must be:

• Paid in accordance with the FLSA rules
• Reported on a Form W-2, 1099, or another IRS-approved statement

Deduction Limits:

• Up to $12,500 per year for single filers
• Up to $25,000 per year for joint filers

Income Phaseout:

• Deduction phases out for taxpayers with Modified Adjusted Gross Income over:
• $150,000 (single filers)
• $300,000 (joint filers)

Available to All Taxpayers:

You can claim this deduction whether or not you itemize.

Other Requirements:

• You must provide your Social Security Number on the return
• Married couples must file jointly to claim the deduction

Employer Reporting:

Employers and other payors must report the total amount of qualified overtime compensation to the IRS (or SSA) and furnish statements to employees.

Tax Payments



The summer months in the office are when we reflect on the previous year and address any concerns we had or look at items that clients had challenges with. One such area was payment of their IRS bills and/or making estimate payments.

SafeSend makes it easy for clients receiving their tax returns electronically to make payments.

When you first open your return, you will see this:

To make payments, click on the Make Tax Payment tab. Then you will need to choose whether you are making a tax payment, or an estimate:

To make a tax payment, click that link and you will see this:

It is important to note that SafeSend does NOT know when you make a payment, or the amount that has been paid. If you click on "Pay" tab, you will be directed to the IRS website or the state site depending on which entity you are paying.



After hitting pay you are directed to this screen and you can decide if you want to make a payment online, or use a check or money order and mail in your payment. We recommend that you make your payment online. The IRS gives you to option to pay with a credit card, or to submit your banking information and have them withdrawal the amount from your checking or savings account. Using a credit card does require you to pay a service fee, however, if you have them withdrawal from you bank account there is no fee. This prevents any lost or stolen mail and assures that your payment is made on time.

Once you have made you payment, you can return to the tax payment page where you can add the details of your payment by clicking on the "Add Payment Details" link. This is strictly for your information and to track your payments. SafeSend will not import that data for you.

To make an estimate payment you will open the return and click on the Make A Payment tab and this time instead of Tax Payment, you will click on Estimate Payments. Then you will have this page:

You will see on the left are the dates estimates are due along with the amount. Again, you will be able to choose to pay online with your credit card or bank account, or you can print your voucher and mail it in with a check.

Office Hours

Monday-Thursday 9:00am-4:00pm

September 1-CLOSED for Labor Day

Beginning September 2

Monday-Friday 9:00am-4:00pm

DON'T FORGET

3rd Quarter Estimates

Due September 15, 2025