Big Changes Ahead: Draft 2026 W-2 Reflects OBBBA Tip & Overtime Deductions!

The IRS has published draft versions of Forms W-2 and W-2c for the 2026 tax year. The revised forms introduce new reporting requirements aligned with the One Big Beautiful Bill Act’s (OBBBA’s) new deductions for tips and overtime. For 2025 through 2028, the OBBBA creates a deduction of up to $25,000 for tip income in certain industries, with income-based phaseouts. The law also creates a deduction of up to $12,500 ($25,000 for joint filers) for qualified overtime pay, with income-based phaseouts. Payroll taxes still apply to both types of income. The IRS said that for the 2025 tax year, there will be no changes to Form W-2. View the 2026 W-2 draft version: https://bit.ly/4lFHnOB