{"id":7438,"date":"2025-09-10T13:53:47","date_gmt":"2025-09-10T13:53:47","guid":{"rendered":"https:\/\/www.tax1099.com\/blog\/?p=7438"},"modified":"2025-09-30T04:31:42","modified_gmt":"2025-09-30T04:31:42","slug":"w-2-draft-changes-under-the-one-big-beautiful-bill-act-obbba","status":"publish","type":"post","link":"https:\/\/www.tax1099.com\/blog\/w-2-draft-changes-under-the-one-big-beautiful-bill-act-obbba\/","title":{"rendered":"IRS Update: 2026 W-2 Draft Changes under the One Big Beautiful Bill Act (OBBBA)"},"content":{"rendered":"<p>The IRS posted draft 2026 Forms W\u20112 and W\u20112c in mid\u2011August 2025, reflecting OBBBA provisions. These proposed changes affect how employers report tips, overtime premiums, and contributions to newly created children\u2019s savings accounts, often referred to as \u201cTrump Accounts.<\/p>\n<h2 data-start=\"855\" data-end=\"879\">Key Updates on 2026 W-2 Draft<\/h2>\n<h5 data-start=\"881\" data-end=\"985\"><strong data-start=\"881\" data-end=\"901\">Addition of New Box 12 Codes<\/strong><\/h5>\n<p data-start=\"881\" data-end=\"985\">The draft form introduces three new codes that employers must track and report:<\/p>\n<ul data-start=\"986\" data-end=\"1262\">\n<li data-start=\"986\" data-end=\"1038\">\n<p data-start=\"988\" data-end=\"1038\"><strong data-start=\"988\" data-end=\"994\">TP<\/strong> \u2013 Total qualified tips (per OBBBA rules).<\/p>\n<\/li>\n<li data-start=\"1039\" data-end=\"1148\">\n<p data-start=\"1041\" data-end=\"1148\"><strong data-start=\"1041\" data-end=\"1047\">TT<\/strong> \u2013 Total qualified overtime premium (the \u201chalf\u201d portion above the regular rate in time-and-a-half).<\/p>\n<\/li>\n<li data-start=\"1149\" data-end=\"1262\">\n<p data-start=\"1151\" data-end=\"1262\"><strong data-start=\"1151\" data-end=\"1157\">TA<\/strong> \u2013 Employer contributions to \u201cTrump Accounts\u201d (for eligible children born on or after January 1, 2025).<\/p>\n<\/li>\n<\/ul>\n<h5 data-start=\"1264\" data-end=\"1282\"><strong data-start=\"1264\" data-end=\"1280\">Box 14 Split and Renumbered<\/strong><\/h5>\n<ul data-start=\"1283\" data-end=\"1440\">\n<li data-start=\"1283\" data-end=\"1317\">\n<p data-start=\"1285\" data-end=\"1317\"><strong data-start=\"1285\" data-end=\"1292\">14a<\/strong> \u2013 \u201cOther\u201d (as before).<\/p>\n<\/li>\n<li data-start=\"1318\" data-end=\"1440\">\n<p data-start=\"1320\" data-end=\"1440\"><strong data-start=\"1320\" data-end=\"1327\">14b<\/strong> \u2013 Treasury tipped-occupation code (to identify employees in occupations qualifying for the new tip deduction).<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"1442\" data-end=\"1491\"><strong>Note<\/strong>: The correction <a href=\"https:\/\/www.tax1099.com\/wage-tax-forms\/efile-form-w2c-online\">form W-2c<\/a>\u00a0mirrors these changes.<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-7440\" src=\"https:\/\/www.tax1099.com\/blog\/wp-content\/uploads\/2025\/09\/W-2-draft-info.png\" alt=\"W-2 draft 2026 changes\" width=\"800\" height=\"467\" \/><\/p>\n<h2 data-start=\"1498\" data-end=\"1526\">Action Checklist for Employers<\/h2>\n<h5 data-start=\"1528\" data-end=\"1569\">1. Payroll Data Capture- Start Now<\/h5>\n<p data-start=\"1570\" data-end=\"1711\">Configure payroll and HRIS systems to capture qualified tips, overtime premium, and Trump Account contributions in line with the draft codes.<\/p>\n<h5 data-start=\"1713\" data-end=\"1775\">2. Occupation Coding for Tipped Employees- October 2025<\/h5>\n<p data-start=\"1776\" data-end=\"1951\">A new Treasury-issued tipped occupation list is expected by early October 2025. Employers will need to assign a Treasury code to each tipped employee and report it in Form <a href=\"https:\/\/www.tax1099.com\/blog\/w-2-box-14-codes\/\">W-2 Box 14b<\/a>.<\/p>\n<h5 data-start=\"1953\" data-end=\"2010\">3. Layout &amp; Template Updates- Before Year-End 2025<\/h5>\n<p data-start=\"2011\" data-end=\"2085\">Ensure W-2 and W-2c templates reflect the new <a href=\"https:\/\/www.tax1099.com\/blog\/what-are-form-w-2-box-12-codes\/\">W-2 Box 12<\/a> and Box 14 structure.<\/p>\n<h5 data-start=\"2087\" data-end=\"2131\">4. Employee Communications- Draft Now<\/h5>\n<p data-start=\"2132\" data-end=\"2198\">Prepare plain-English explanations to help employees understand:<\/p>\n<ul data-start=\"2199\" data-end=\"2423\">\n<li data-start=\"2199\" data-end=\"2253\">\n<p data-start=\"2201\" data-end=\"2253\">Why tips (TP) and overtime (TT) appear separately.<\/p>\n<\/li>\n<li data-start=\"2254\" data-end=\"2348\">\n<p data-start=\"2256\" data-end=\"2348\">How new deductions (up to $25,000 for tips; up to $12,500\/$25,000 for overtime) may apply.<\/p>\n<\/li>\n<li data-start=\"2349\" data-end=\"2423\">\n<p data-start=\"2351\" data-end=\"2423\">What are Trump accounts, and how will employer contributions be reported?<\/p>\n<\/li>\n<\/ul>\n<h5 data-start=\"2425\" data-end=\"2464\">5. Testing &amp; Validation \u2013 Q4 2025<\/h5>\n<p data-start=\"2465\" data-end=\"2624\">Run parallel payroll\/W-2 tests to confirm reporting accuracy for new codes and fields. Coordinate with payroll providers and HRIS vendors for software updates.<\/p>\n<h2 class=\"h2\">Key Deadlines for Form W-2<\/h2>\n<p>For income earned in 2025, employers must meet the following deadlines:<\/p>\n<ul>\n<li><strong>February 02, 2026<\/strong>: Furnish Form W-2 to employees and file with the SSA.<\/li>\n<li><strong>February 02, 2026<\/strong>: Submit Form W-3 (transmittal form) to the SSA along with the W-2s.<\/li>\n<\/ul>\n<p><strong>Note<\/strong>: The original deadline to submit the <a href=\"https:\/\/www.tax1099.com\/wage-tax-forms\/efile-w2-online\">W-2 form<\/a> to the IRS and furnish the recipient copies is January 31. However, it falls on a Saturday, so the next working day is considered as the new <a href=\"https:\/\/www.tax1099.com\/blog\/w2-deadline-2023\/\">W-2 deadline<\/a>.<\/p>\n<p>Missing these deadlines can result in penalties ranging from $60 to $310 per form, with a maximum of $3.78 million annually for large businesses.<\/p>\n<p><strong>Tax1099<\/strong>, an IRS-authorized eFile provider, is here to help! Keep your W-2 organized in one single place. Sign up for Tax1099 today and automate your payroll reporting task in just a few clicks.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The IRS posted draft 2026 Forms W\u20112 and W\u20112c in mid\u2011August 2025, reflecting OBBBA provisions. These proposed changes affect how employers report tips, overtime premiums, and contributions to newly created children\u2019s savings accounts, often referred to as \u201cTrump Accounts. Key Updates on 2026 W-2 Draft Addition of New Box 12 Codes The draft form introduces [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":7439,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[782,186],"tags":[],"class_list":["post-7438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-form-w-2","category-irs-updates"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>IRS Update: 2026 W-2 Draft Changes under the One Big Beautiful Bill Act (OBBBA) | Tax1099 Blog<\/title>\n<meta name=\"description\" content=\"Understanding and implementing annual W-2 changes is more than a tax obligation. 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