New W-2 Boxes for Tips and Overtime — What to Set Up Now
Qualified tips and overtime need separate Box 12 codes and an occupation code in Box 14b on 2026 W-2s. Check your payroll setup before year-end.
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Why not wait until January?
If you have tipped or hourly staff, do not wait until January to find out whether payroll captured the information needed for 2026 W-2 reporting. Qualified tips and qualified overtime need to be broken out separately with separate Box 12 codes and an occupation code in Box 14b.
Is this a payroll setup issue?
That makes this a payroll setup issue before year-end, not a last-minute form problem after the year has closed.
What should you confirm now?
The practical step is to confirm that the payroll process is identifying the right information as it happens. If the details are not being captured separately now, January may arrive without a clean way to prepare the reporting.
Does this add work for employees?
The goal is not to add more work for employees or guests at tax treatment. It is to make sure the payroll records are ready to support the required reporting when the W-2s are prepared.
When should you check the setup?
Check the setup before you year-end so the information is available when it is needed. Need help getting your books cleaned up? Ta-Da! Accounting can help you get back on track.
Need help getting your books cleaned up? Call (310) 800-4494 or send us a note.