On January 9, 2026, the IRS published the final version of the 2026 Form W2. Please refer to the article "IRS Releases Final 2026 Form W-2." for more information.

Update October 16, 2025: On October 14, 2025, the IRS released a third draft of the 2026 Form W-2. Notable changes include: (1) adding code "TS" for Box 12 for cash tips reported in a "specified service trade or business," such as health, law, accounting, etc. that do not qualify as qualified tips; (2) adding instructions to Box 14b to use occupation code "000" if cash tips are not qualified tips; and (3) revising the definition of code "TA" for Box 12 to further define the "Trump Account" to "section 128 Trump account contribution program paid to a Trump account of an employee or a dependent of an employee."

Update September 17, 2025: On September 15, 2026, the IRS released a second draft of the 2026 Form W-2. This draft changes the instructions regarding the "TP" code used in Box 12 from "qualified tips" to "cash tips."

On August 15, 2025, the Internal Revenue Service (IRS) released a draft of the 2026 Form W-2 that provides employers with a sneak peek into reporting requirements in response to the One Big Beautiful Bill Act (OBBBA).  On August 21, 2025, the IRS also released a draft of the 2026 W-4 that provides employees with a sneak peek into deduction requirements under the OBBBA.

As previously shared, under the OBBBA, employers are required to report the total amount of qualified tips, qualified tipped position, and qualified overtime for applicable employees, however, for the 2025 tax year, the IRS confirmed that the Form W-2 will not be changed.

The Draft 2026 Form W-2 reflects the following notable changes:

• Box 12 to report “TP” for qualified tips, “TT” for qualified overtime, and “TA” for contributions to an employee’s Trump Account.
• Box 14b to report the qualifying tipped occupation.

The Draft 2026 Form W-4 reflects the following notable change:

• Expanded deduction worksheet to estimate qualified tips, qualified overtime, new car loan interest, and deductions for individuals who are at least 65 years old.
• Adds a checkbox to certify that 2026 exemption conditions are met.

Please note that the drafts may be further revised and we are still awaiting additional guidance to help employers properly track and report this information.  Additional information can be found on the IRS One Big Beautiful Bill Act of 2025 provisions website. HEC will continue to monitor guidance and provide updates as appropriate.

Please note the information provided is for informational purposes only and may not reflect the most current regulatory developments.  We strive to keep our materials up to date, but there may be occasions when information becomes outdated.  Users are encouraged to verify the applicability of the content before relying on it for decision-making.  If you have any questions or concerns regarding the accuracy or relevance of the information, please contact us directly for assistance.