The IRS has released draft versions of Form W-2 and W-2c for 2026, previewing changes required under the One Big Beautiful Bill Act (OBBBA). While these are still in draft form, they provide an important look at what employers, payroll teams, and taxpayers should expect when reporting wages starting in 2026.
New Box 12 Codes
The draft adds three new reporting codes under Box 12:
- TP — Total qualified tips.
- TT — Total qualified overtime compensation.
- TA — Employer contributions to “Trump Accounts,” a new type of savings account created under the OBBBA.
These additions will provide greater transparency in wage reporting and ensure that employees can properly claim deductions on their individual returns.
Revisions to Box 14
Currently, Box 14 on the W-2 is used as a general “catch-all” for other information. The draft W-2 revises this box into two parts:
- Box 14a — “Other,” for miscellaneous information.
- Box 14b — Treasury tipped occupation code, which will correspond to a government-issued list of jobs eligible for tipped occupation deductions.
This change is designed to align employer reporting with new deduction rules under the OBBBA.
Implementation Timeline
Employers should note:
- The revised W-2 format is not required for 2025 wages.
- The new requirements are expected to apply to wages paid in 2026.
- Final instructions are still pending, and details may shift before the draft becomes official.
What Employers Should Do Now
Even though these forms are only drafts, organizations can take steps now to prepare:
- Review payroll systems — Ensure systems can capture qualified tips, overtime premiums, and new contribution types.
- Coordinate with vendors — Payroll and HR software providers may need time to program changes for Boxes 12 and 14.
- Stay alert for IRS guidance — Final instructions and the Treasury’s tipped occupation list are expected closer to implementation.
- Communicate with employees — Be ready to explain new codes and what they mean for take-home reporting and potential deductions.
- Test early — Once updated, run payroll system checks to make sure reporting aligns with IRS requirements.
Why This Is a Positive Opportunity
While new reporting requirements can feel like extra work, they bring advantages:
- Transparency: Clearer reporting of tips and overtime benefits both employers and employees.
- Employee confidence: Workers will see more accurate reflection of their compensation.
- Preparation time: With the draft released well ahead of 2026, employers can make changes gradually instead of scrambling last-minute.
- Opportunities for nonprofits and smaller employers: Early preparation can help lean payroll teams avoid penalties and ensure compliance without costly mistakes.
TrimnerBeckham’s Perspective
At TrimnerBeckham PLLC, we’re monitoring these draft changes closely. As a firm dedicated solely to nonprofit tax services, we know how payroll and compliance intersect with transparency and accountability. By preparing now, nonprofits and other employers can turn these updates into an opportunity to strengthen their systems, build trust with employees, and stay ahead of IRS compliance.
📌 Have questions about how the draft 2026 W-2 may affect your organization? Our team can help you prepare for these changes before they become mandatory.
✍️ By TrimnerBeckham PLLC
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