2026 W-2s report qualified tips and overtime in new boxes, and every tipped employee needs an occupation code. The W-2 only shows what payroll was told. In 60 minutes, see the payroll setup to check before W-2s go out on February 1.
Under the IRS’s 2026 Form W-2 instructions, restaurants report tips and overtime in three new places. Penalty relief for this reporting covered tax year 2025 only.
Qualified tips. The amount comes from how tips are coded in payroll, so tips, auto-gratuities and service charges need to be kept apart.
Qualified overtime compensation: the premium part of FLSA-required overtime, the “half” in time-and-a-half, not the whole overtime check.
A Treasury Tipped Occupation Code for each tipped employee. If payroll has no code on file, it has nothing to report.
Built for restaurant, bar and café owners and managers with tipped staff, and the people who run their payroll.
Where each one belongs in payroll and in your books, and why a mandatory service charge is wages, not a tip.
Your POS tip report against payroll tips against tips payable: how to line them up and what a mismatch looks like.
Where they live in payroll and how to confirm every tipped employee has one before W-2s are produced.
Why the overtime premium needs to be identifiable on its own, and what to ask your payroll provider.
W-2s and 1099-NEC are both due Monday, February 1, 2027, and the 1099-NEC threshold is $2,000 for 2026 payments.
Live Q&A at the end. Bookkeeping and payroll-records questions get answered on the spot; tax questions belong with your CPA.
Register and the Tip & Payroll Checklist comes straight to your inbox: the six setup checks and the February 1 dates on one page.
Check your inbox for the confirmation and your checklist. The Zoom link comes by email before January 12, 2027.
Download the Checklist Add to Google CalendarOutlook or Apple Calendar? Download the calendar file.
Before you register.
Yes. Register below and you get the checklist right away, the Zoom link before the session and the replay afterward.
Yes. Everyone who registers gets the replay by email, so register even if the time doesn't work for you.
No. Your payroll provider files W-2s from what's set up in its system: pay codes, tip amounts and, for 2026, each tipped employee's occupation code. This session is about checking that setup and the records behind it.
No. It covers bookkeeping records and payroll setup. Questions about who qualifies for the tip or overtime deduction, or how it affects a return, go to your CPA.
All of them. The examples use common restaurant setups such as Gusto, ADP and Toast Payroll, but the checks are the same wherever you run payroll.
If you have tipped employees, yes. Salons, spas, hotels and venues are welcome. The examples are restaurant and bar ones.