Weekly Column: Celebrating Employees Through Meaningful Tax Relief

Employees are key to business success. They are the faces behind counters; the voices greeting customers; and the force behind Idaho and American production. The first Friday of March is observed as Employee Appreciation Day, a time to recognize employees’ critical role in business success. Yet, policies enacted in the Working Families Tax Cuts celebrate employees every day by enabling them to keep more of what they have earned, get ahead and plan for the future.

This legislation not only prevented the largest tax hike in history, but it also provided immediate new tax relief for employees across the nation. That support begins before Idahoans even get to work in the morning, for example, through a new deduction of up to $10,000 for Car Loan Interest that is making it easier for Idahoans to afford U.S.-assembled cars.

In addition, millions of hourly workers will benefit from “No Tax on Tips,” a new deduction of up to $25,000. From waiters and barbers to handymen and taxi drivers, workers in a wide variety of professions will be able to keep more of what they earn from a job well done.

The Working Families Tax Cuts also reward hard work through the new “No Tax on Overtime” deduction, enabling them to deduct up to $12,500 (or $25,000 for joint filers) of overtime premium payments. Nurses staying late with patients who need critical care, factory staff working hard to afford their children’s tuition and construction workers doing twelve-hour shifts to ensure projects stay on schedule will earn more from those long hours. A wide range of jobs qualify: the White House estimates 24 percent of Idaho’s workforce could be eligible for this relief.

The law also addresses some of the biggest financial stressors for working parents. Child care has become so expensive that some families are wondering if they can even afford to have both parents work full-time. Now, businesses are incentivized to provide child care to their employees through a permanent expansion of the Employer-Provided Child Care Credit. In addition, the law increased the Child Tax Credit, Child and Dependent Care Tax Credit and the Dependent Care Assistance threshold, making that care more affordable.

Another major concern many Idahoans face is how to make ends meet if a loved one has a medical issue that requires long-term care—or, more happily, if one has a new baby. Those families now have greater stability because of the permanent extension and enhancement of the Paid Family and Medical Leave (PFML) Tax Credit, which gives businesses more incentive to provide employees with PFML. It also expands the businesses eligible to receive the credit and includes those that utilize insurance policies to provide paid leave.

The law also restored and made permanent critical provisions that are already increasing domestic investment and boosting economic growth, enabling business owners to reinvest capital into their businesses and—critically—their employees. As a result, the White House estimates that Idahoans will see up to $6,400 in real wage increases over the next four years. Additionally, because many of these changes apply retroactively to all of 2025, many Americans will see larger refunds this tax filing season, which the U.S. Department of the Treasury estimates will reach $100 billion more than last year.

The better equipped people are to meet their families’ needs, the better they can engage at work, which benefits Idaho businesses and adds needed productivity to the economy. As we recognize employees’ critical role in our communities, the Working Families Tax Cuts are helping them keep more of their hard-earned money.

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