Last year, the W-2 had no dedicated place for tips or overtime, so we pointed employers to box 14 as a workaround. For tax year 2026, that workaround is gone. The IRS's 2026 General Instructions for Forms W-2 and W-3 split box 14 in two and add new box 12 codes built for exactly this purpose. A box 14 label created for tax year 2025 doesn't carry into 2026, because the form itself changed.
What replaces box 14 on the 2026 W-2?
Quick answer
Box 12 gets three new codes: TA for Trump account contributions, TP for cash tips, and TT for qualified overtime compensation. Box 14 itself splits into 14a (the old "other" catch-all) and 14b, a new field for the employee's Treasury Tipped Occupation Code. None of this changes what's taxable. Tips and overtime still count toward withholding and FICA. The new fields change how the data reaches the employee's tax return.
OBBBA changes to W-2s and 1099s for tax year 2026
The One Big Beautiful Bill Act (P.L. 119-21) changed what employers and payers report on W-2s and 1099s, starting with tax year 2026. Workers claim the new deductions on their own tax returns. Employers and payers report the amounts.
- Tips. Workers can deduct up to $25,000 for tax years beginning after 2024 and ending before 2029. Qualified tips are voluntary cash or charged tips, including tips received through tip-sharing. Mandatory service charges don't count. Tips must be received in an occupation on the IRS list.
- Occupation codes. The IRS final regulations list more than 70 occupations in eight categories. Codes are on IRS.gov/TTOC. For a plain-language walkthrough, see our guide to the final qualifying occupation list.
- Overtime. Workers can deduct up to $12,500 ($25,000 if married filing jointly) of qualified overtime for the same tax years. Only the premium above the regular rate that the Fair Labor Standards Act (FLSA) requires qualifies.
- Payroll taxes don't change. Tips and overtime are generally still subject to federal income tax withholding, Social Security tax, and Medicare tax.
Changes to Form W-2
| Box | What changed |
|---|---|
| Box 12, code TP | Total cash tips reported to the employer. You must also list an occupation code in box 14b. |
| Box 12, code TT | Total qualified overtime compensation: the amount above the regular rate that the FLSA requires, such as the "half" in time-and-a-half. |
| Box 12, code TA | Employer contributions to the Trump account of an employee or an employee's dependent, paid under a section 128 Trump account contribution program. |
| Box 14a | "Other," the same use as the old box 14. |
| Box 14b | Treasury Tipped Occupation Code(s). Enter up to two codes. Required when box 12 code TP reports cash tips. |
- Trump account contributions. Beginning July 4, 2026, employers may contribute up to $2,500 a year, indexed for inflation after tax year 2027, to the Trump account of an employee or an employee's dependent. The amount is excluded from the employee's gross income if paid under a section 128 program. Learn more about Trump account contributions here.
- Territory W-2s. For Forms W-2AS, W-2CM, W-2GU, and W-2VI, check with the territory on whether codes TP, TT, and TA apply. The IRS W-2 instructions do not cover Puerto Rico.
Box 12 code TP: reporting cash tips
Use code TP to report the total cash tips your employee reported to you during the year. You're already tracking these tips for Social Security and Medicare purposes. What's new is that the amount now gets its own line, because it feeds directly into the employee's No Tax on Tips deduction.
Code TP also requires the employee's Treasury Tipped Occupation Code in box 14b, because only tips earned in a qualifying occupation count toward the deduction. We built out the full list here: No tax on tips: the IRS has finalized the qualifying occupation list.
Separate accounting is required starting with tax year 2026. The penalty relief that covered 2025 filings doesn't carry forward.
Box 12 code TT: reporting qualified overtime
Code TT captures qualified overtime compensation, but only the premium portion required under FLSA section 7. In plain terms: if an hourly employee works overtime at time-and-a-half, only the "half" counts toward TT. The base rate they'd have earned regardless doesn't. Get this wrong, and your employee either claims a deduction they can't defend or misses one they're entitled to.
Same caveat as tips: reporting overtime with code TT doesn't exempt it from withholding or FICA. The box supports the employee's deduction. It doesn't change what you owe.
Box 14a and box 14b: what's left of box 14
Box 14a still does what box 14 used to do: state disability insurance, union dues, anything without its own dedicated box.
Box 14b is new and single-purpose. It holds the Treasury Tipped Occupation Code (up to two) and is required any time you report cash tips with code TP.
Deadlines for the 2026 W-2
Employee copies and SSA filing are both due February 1, 2027, because January 31 falls on a Sunday.
Stay ahead of every deadline
Your 2027 compliance calendar
A month-by-month guide with all key federal payroll and tax deadlines, holidays, and monthly tips.
Bookmark Your Copy →Where payroll setup changes for 2026
- The 2025 box 14 label is retired. A "cash tips" or "qualified OT" label built into box 14 for 2025 no longer matches the form. That data now lives in box 12 and box 14b.
- Job classifications map to the occupation list. Not every tipped role qualifies, and box 14b can't be populated accurately until each tipped job is matched to a code on the IRS list.
- Payroll system support is part of the picture. Codes TP and TT and box 14b each depend on data your payroll system captures during the year, not at W-2 time.
Note: This information is for informational purposes only and does not constitute formal tax, legal, or compliance advice. Always consult with qualified tax advisors, legal counsel, and your organization's internal teams for guidance specific to your situation. Additional regulations may apply. For the most accurate and up-to-date information, refer to official government resources and regulatory agencies.
