The IRS has released a draft 2026 Form W-2 that introduces significant changes to support the One Big Beautiful Bill Act (OBBBA) overtime and tips tax deduction provisions. The draft form adds a new reporting field to report the occupation of tipped employees and three new Box 12 codes to report Trump Account contributions, qualified overtime, and qualified tips.
The form splits Box 14 into two fields: Box 14a retains “Other” while new Box 14b captures “Treasury tipped occupation code” for tipped positions. The IRS must publish an official list of qualifying tipped occupations by October 2, 2025, and will assign specific Treasury codes to these occupations for employers to populate Box 14b for eligible employees. Three new Box 12 codes are introduced: “TA” for employer contributions to Trump account, “TP” for total qualified tips, and “TT” for total qualified overtime compensation. Filing deadlines change from February 2, 2026 to February 1, 2027.
As outlined in Information Release 2025-82, the IRS will provide tax year 2025 transition relief for OBBBA tip and overtime reporting changes, which means employers do not need to make any changes to their 2025 tax year reporting. Starting in tax year 2026, employers must modify payroll systems to separately track and report qualified overtime compensation and tips in new Box 12 codes. Employers with tipped employees must classify positions using specific Treasury codes in Box 14b. These changes affect all employers paying overtime or whose employees receive tips, necessitating payroll system updates and new compliance procedures.
NOTE: This draft form is not for filing and is subject to future changes as necessary.
