New Tip & Overtime Codes to W-2 (IRS Tax Form)

Chris Picciurro, CPA breaks down a little-known, but hugely important, update from the One Big Beautiful Bill Act (OB3): the addition of three new codes to Box 12 of the IRS Form W-2, affecting millions of workers who earn tips and overtime pay.

This video also shows you a first look at the draft 2026 W-2 form recently released by the IRS, explaining exactly what’s changed and what employers, employees, and tax pros need to watch for moving forward.

In this video, you’ll learn:
✅ What new W-2 Box 12 codes were added by OB3
✅ How tips and overtime are now reported using TP and TT codes
✅ What the new TA code means for Trump-style retirement accounts
✅ How this impacts federal and state-level tax reporting
✅ Why understanding these codes is critical for employers and employees alike

🎯 Key Highlights:
• OB3 introduces three new W-2 Box 12 codes for tax year 2026:
• TA — Employer contributions to Trump accounts
• TP — Reported cash tip income
• TT — Qualified overtime compensation
• These codes help clarify deductible and non-deductible income types
• Tip and overtime deductions are not automatic—but must be reported to be eligible
• Updates apply to all employers and states starting with 2026 W-2 filings
• Employers must ensure accurate categorization and reporting of compensation