The IRS has introduced a draft version of the 2026 Form W-2, which includes new fields to accommodate tax exemptions on tips and overtime income under the One Big Beautiful Bill Act.
In the draft, the agency divided Box 14 into two sections: 14a for “Other” and 14b for “Treasury tipped occupation code.”
The IRS is expected to release a list of qualifying occupations eligible for the "no tax on tips" deduction by Thursday, Oct. 2.
This deduction allows for up to $25,000 in qualified tips annually, phasing out for single taxpayers earning over $150,000 or joint filers over $300,000.
Additionally, the IRS added new codes to Box 12 for reporting tips and overtime pay. Overtime pay can be deducted — up to $12,500 for individual filers or $25,000 for married couples filing jointly — beginning with the 2025 tax year. Read more.