Heads‑Up: 2026 W‑2 Draft Changes (OBBB)
Short, plain‑English summary for our students and payroll teams.
Short, plain‑English summary for our students and payroll teams.
The IRS released draft versions of the 2026 Forms W‑2 and W‑2c. These drafts reflect changes from the OBBBA. Here’s what’s new and what to do so tax season goes smoothly.
What’s changing
Box 12 — New Codes
| Code | Meaning |
|---|---|
| TA | Employer contributions to a Trump Account |
| TP | Total amount of Qualified Tips |
| TT | Total amount of Qualified Overtime Compensation |
These items will need accurate year‑to‑date tracking in payroll.
Box 14 — Split into 14a and 14b
14a keeps the items that used to live in Box 14, including:
- State Disability Insurance (SDI) taxes withheld
- Union dues
- Uniform payments
- Health insurance premiums deducted
- Nontaxable income
- Educational assistance payments
14b adds a Treasury‑mandated Tipped Occupation Code.
Why this matters
If overtime or tips are set up wrong—or not reported the new way—employees could receive incorrect W‑2s. That can lead to filing delays, IRS notices, and a lot of frustration at tax time, especially for early filers counting on the Earned Income Credit and Child Tax Credit.
What to do now
- Update payroll setup. Make sure your system can track TA, TP, TT, and the new 14a/14b structure—including the Tipped Occupation Code.
- Educate your team. Ask employees to look at their pay stubs during the year and report anything that seems off—overtime totals, tips, and occupation codes.
- Align on the details. Confirm what will appear on the W‑2 and that it matches your pay records.
- Run a test. Before year‑end, generate sample W‑2s and spot‑check overtime, tips, and codes.
- Document your process. Keep notes on your controls and training in case questions come up later.
Draft forms
These links go to the current IRS draft forms (the official versions may change).