New Tip Reporting Fields
Starting in 2026, W-2 forms may include new fields to separately report tip income that qualifies for the federal income tax exemption. This helps both workers and the IRS track exempt vs. taxable income.
What to Look For
- A separate line item for exempt tip income — tips that are not subject to federal income tax under the new rules
- Your regular wages and overtime pay reported in their own fields
- FICA wages may differ from federal taxable wages, since Social Security and Medicare taxes still apply to all income including exempt tips
Important Notes
- Even though tips may be exempt from federal income tax, FICA taxes (Social Security + Medicare) still apply to all tip and overtime income
- Your employer is responsible for the reporting — you don't need to take special action
- State income taxes are separate and may not follow the federal exemption
This is an approximate guide based on proposed legislation. Your actual W-2 may differ. Consult your employer or a tax professional for specific questions about your W-2.