Draft 2026 Form W-2 includes boxes and codes for tips and overtime

A draft version of Form W-2, Wage and Tax Statement, for 2026 includes boxes and codes for reporting qualified tips and qualified overtime compensation that can be deducted temporarily under the provisions of H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act.

The draft form includes a new box 14b labeled “Treasury tipped occupation code.” The IRS must provide by Oct. 2 a list of occupations where workers can claim the deduction for qualified tips. Box 14a retains the label of “Other” as box 14 did on Forms W-2 in previous years.

The instructions for the draft form say of box 14b: “Employers use this box to report the Treasury Occupation Code for your tipped occupation. Use this code in reporting the deduction for qualified tips on Sch. 1-A (Form 1040).”

Instructions for box 12 include two new codes: TP for total amount of qualified tips and TT for total amount of qualified overtime compensation.

The draft form does not apply for 2025, although the H.R. 1 provisions on tips and overtime pay do apply. However, the IRS said earlier this month that it was not updating various forms, including Form W-2, to include these changes. It did say that it will provide transition relief for tax year 2025 for taxpayers claiming the deduction and for employers and payers subject to the new reporting requirements.

The deductions for qualified tips and qualified overtime compensation are available through tax year 2028.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.