What is the One Big Beautiful Bill Act?

We have heard about the new bill passed by the United States Congress called The One Big Beautiful Bill Act (OBBA), which is trending recently on news and social media. The legislation was introduced in July 2025 and will be effective till 2028. It's been a year since this bill has been in action in our taxation system.

As professional nannies and caretakers, we often forget many important policies introduced by the government and the system, which have good or bad effects on our lives. While we become too busy with our day-to-day activities, there are many things to keep in our minds. Some are minor and some are major policies, but in this economy, anything that helps bring relief on taxes is always major. We at The Nanny Edit are always here to help you. In this profession, we know that most of the nannies and caretakers look forward to overtime. Occasionally the nanny needs those extra hours, or the parents require those extra hours from the nanny. Working overtime brings extra hours and sometimes also a bonus. This overtime pay can look insignificant while working, but it reflects really well at the end of the month on the paycheck. One last thing to worry about is the salary we receive after tax. 

In this OBBA policy, there are many benefits to the profession that require working overtime. This bill has hundreds of provisions, but let’s focus on those that will affect you as an employee who works overtime. Here are some important facts about this OBBA tax policy you should be aware of: 

Tax deduction for overtime income.

Under this bill, the law creates a new tax deduction of up to $12,500 (if you are single) and $25,000 (if you are married) of qualified overtime pay. The policy states that if you earn less than $150,000 in a year, you are eligible for a tax deduction on your overtime pay (up to $25,000). To be eligible, your employer must pay your overtime pay voluntarily, as determined by an agreed-upon agreement between employer and employee. This bill qualifies 68 different job types. Good news for all the nannies and caregivers: This new OBBA also qualifies your profession. 

Note: The tax deduction is not allowed if the individual does not include their social security number on their federal income tax return or if the social security number was issued on or after the due date, including extensions, of the federal income tax return. 

How does OBBA work for you?  

Example: A family employed a full-time nanny. 

Position: Full-time nanny

Hourly wage: $35/hour

Works: 45 hours per week

Her weekly pay would be:

40 regular hours × $35 = $1,400

5 overtime hours × $45 (time-and-a-half) = $225

5 overtime hours x $10 (qualified OT) = $50

Total weekly pay = $1,625

If you work for a week with Overtime of 5 hours per week with Overtime pay of $35 per hour, you might have benefited from $50 from tax deductions. This is one small example to show how OBBA works and to reflect on your annual federal tax return.

Note: The important part of this tax deduction is that the family must employ you on a contractual basis (work contract). Avoid cash tips and off-the-book pay. This tax deduction does not affect the employer's overtime pay, so there is no reason to go off the books.

Find your next family. 

At The Nanny Edit, we are eager to listen to your needs and understand your requirements. Let us handle all the paperwork between you and your employer. We make sure you get all the legal benefits and find the best family to serve. We care for you, and we are here for your best interest. If you're searching for a new job in any part of California, including Orange County, Los Angeles (L.A.), or San Diego, or if you are from Austin, Texas, and need a family that obeys the laws, we can help. We, The Nanny Edit, will make sure you have a contract that benefits you and is always in line with the law. Visit us, and we make sure you get everything you deserve.

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