Tax

The IRS has released draft December 2026 versions of Forms 1099-NEC and 1099-MISC, and the changes are more than cosmetic. Both drafts introduce new fields for cash tips, Treasury Tipped Occupation Codes, and overtime compensation, reflecting reporting changes tied to deductions created under recent federal legislation. The drafts also rework how payer address information is displayed, splitting what was previously a single payer name-and-address block into multiple separate fields. Because these are draft forms, they are not yet final, but they give payroll, tax, and information-reporting teams an early look at where compliance is heading. On the draft 2026 Form 1099-NEC, the familiar Box 1 for nonemployee compensation becomes Box 1a. New Box 1b is used for cash tips, Box 1c for Treasury Tipped Occupation Code(s), and Box 1d for overtime compensation. The recipient instructions in the draft make clear that the amounts shown in Boxes 1b and 1d are already included in Box 1a. The draft 2026 Form 1099-MISC follows the same policy direction, but with a different box layout. It adds Box 13a for cash tips, Box 13b for Treasury Tipped Occupation Codes, and Box 14 for overtime compensation. The form also removes the prior numbering for the FATCA filing requirement checkbox; on the 2025 version, that item appeared as Box 13, but in the 2026 draft it is no longer numbered. What changed from the 2025 versions? In 2025, Form 1099-NEC had a much simpler structure: Box 1 was Nonemployee compensation, followed by the direct-sales checkbox in Box 2, excess golden parachute payments in Box 3, and federal and state tax boxes after that. There were no separate fields for cash tips, Treasury Tipped Occupation Codes, or overtime compensation. The payer information area also appeared as one combined name/address block rather than multiple separated fields. Likewise, in 2025, Form 1099-MISC did not have dedicated boxes for tips or overtime. Instead, the form showed Box 13 as FATCA filing requirement, Box 14 as reserved for future use, and Box 15 as Nonqualified deferred compensation. In the 2026 draft, those positions shift materially: the FATCA checkbox loses its box number, the formerly blank Box 14 becomes overtime compensation, and the new tip-related items appear as Boxes 13a and 13b. That is a meaningful redesign, not a minor edit. Why this matters These drafts suggest the IRS is preparing to make Forms 1099-NEC and 1099-MISC part of the operational framework for new federal deductions tied to tipped income and overtime compensation. That creates downstream implications for payer systems, year-end reporting logic, tax engine mapping, and recipient communications. Any organization that issues 1099s for nonemployee compensation or miscellaneous income should expect form logic, data capture, and possibly onboarding workflows to change before the 2026 filing cycle is finalized. Bottom line The 2026 draft Forms 1099-NEC and 1099-MISC move beyond traditional income reporting by carving out specific reporting lines for cash tips, Treasury Tipped Occupation Codes, and overtime compensation. Compared with the 2025 forms, the 2026 drafts introduce a more granular reporting structure and alter box numbering in ways that will matter for tax products, payroll systems, and compliance teams. These forms are still drafts, so teams should treat them as directional rather than final, but the reporting intent is already clear. Comparison Guide Form2025 version2026 version1099-NECBox 1 = Nonemployee compensationBox 1 becomes 1a; adds 1b Cash tips, 1c Tipped Occupation Codes, 1d Overtime compensation1099-NECNo separate tip or overtime reportingTip and overtime amounts are called out separately but included in Box 1a1099-NECSingle combined payer name/address areaPayer name and address split into separate fields1099-MISCBox 13 = FATCA filing requirement; Box 14 reserved for future use13a Cash tips, 13b Tipped Occupation Codes, 14 Overtime compensation; FATCA checkbox no longer numbered1099-MISCNo dedicated tip or overtime boxesNew dedicated fields support deduction-related reporting changes

The Work Opportunity Tax Credit (WOTC) has long been a valuable federal incentive designed to encourage employers to hire individuals from targeted groups who face barriers to employment. While the program is currently in a legislative hiatus, forward-looking employers should not interpret this pause as a reason to disengage. In fact, maintaining WOTC screening practices now positions organizations to capture significant tax credits if and when the program is reauthorized. WOTC is a federal tax credit available to employers who hire individuals from specific target groups, such as veterans, long-term unemployed individuals, SNAP recipients, and others. Depending on the category and tenure of the employee, credits can range from hundreds to several thousand dollars per qualified hire. Retroactive WOTC Eligibility Historically, when WOTC lapsed and later reinstated, Congress applied retroactive eligibility, allowing employers to claim credits for hires made during the hiatus period, provided proper documentation and screening were completed at the time of hire. The key principle here is documentation timing. WOTC eligibility hinges on completing prescreening (IRS Form 8850) on or before the day of the job offer and submitting it within required timeframes once the program is active. Why Employers Should Screen for WOTC During the Hiatus If employers stop screening now, they risk: Losing retroactive eligibility for hires made during the hiatus Missing out on potentially substantial tax credits Creating compliance gaps that cannot be corrected after the fact Conversely, employers who continue screening: Preserve eligibility for retroactive credits Maintain consistent hiring workflows Avoid operational disruption when the program resumes Given the historical pattern of WOTC reinstatement, continuing screening is a low-risk, high-upside strategy. To ensure compliance and maximize potential credits, employers should adhere to the following best practices: Integrate Screening into the Hiring Workflow: WOTC prescreening should occur seamlessly during the application or onboarding process, ideally embedded within your ATS or HRIS system. This is critical to maintaining an efficient process within your organization.  Ensure Timely Completion of IRS Form 8850: The form must be completed no later than the date of the job offer. Late completion invalidates eligibility and there are no do-overs. Once the document is late, employers have no further rights.  Maintain Consistent Candidate Experience: Screen all applicants uniformly to avoid bias or compliance risks. WOTC screening should be standardized and nondiscriminatory. This will ensure clean audit results, should your organization be audited.  Retain Documentation Rigorously: Proper recordkeeping is critical, especially during a hiatus period when submission timelines may shift upon program reauthorization. Once again, this is beneficial if your organization is under audit. Monitor Legislative Updates: Stay informed on WOTC status changes so submissions can be made promptly when the program resumes. Our website publishes updates as soon as they are made available. While the concept of WOTC is straightforward, execution is not. Employers often underestimate the administrative burden involved: Managing time-sensitive forms and deadlines Tracking eligibility across multiple target groups Navigating varying state workforce agency requirements Handling documentation audits and compliance reviews Monitoring legislative changes and submission windows For organizations with high hiring volumes or even moderate decentralized hiring, this can quickly become resource-intensive and error-prone.  The WOTC hiatus is not a pause in opportunity, it’s a test of preparedness. Employers who continue disciplined screening practices now will be best positioned to capitalize on retroactive credits when the program resumes. Maintaining compliance, consistency, and operational efficiency during this period can be challenging but it doesn’t have to be. Experian Employer Services provides a comprehensive, scalable solution to manage the full WOTC lifecycle with precision and efficiency. With Experian Employer Services as your partner, you can confidently navigate the hiatus while preserving every potential dollar of tax credit available to your organization. Questions about how to best manage your WOTC process during its hiatus? Reach out to our experts:

By early 2027, employers will be preparing Forms W-2 for tax year 2026 under several updated IRS reporting requirements. The IRS finalized the 2026 General Instructions for Forms W-2 and W-3 on January 30, 2026, introducing new reporting codes, adjustments to certain fields, and clarifications tied to recent legislation.  At the same time, the 2026 Form W-4 was updated to reflect new federal deduction provisions affecting individual withholding calculations. While the overall structure of the form remains familiar, the updates may affect how employees complete withholding elections.  Below is a high-level overview of the most notable changes and what payroll, HR, and finance teams should understand before the 2026 reporting cycle. What Changed on the 2026 Form W-2  New Box 12 Codes: TP and TT  For tax year 2026, the IRS introduced new Box 12 reporting codes tied to recent individual tax provisions.  Code TP - Total amount of cash tips reported to the employer.  Code TT - Total amount of qualified overtime compensation.  These additions support reporting related to new deductions available to certain individuals under Public Law 119-21. Although these deductions may affect employees’ individual tax returns, tips and overtime compensation generally remain subject to federal income tax withholding and payroll taxes.  The instructions also clarify that only the premium portion of overtime pay qualifies for reporting under Code TT. For example, in a time-and-a-half scenario, only the additional half-rate portion of overtime compensation is reported under this code.  Another code introduced for 2026 is Code TA, which is used to report certain employer contributions to “Trump accounts,” a new type of individual retirement account created under Public Law 119-21.  Why this matters  The information reported in these fields may originate from multiple systems, including timekeeping platforms, point-of-sale systems, or payroll calculations. Ensuring consistency across these data sources will be important when preparing year-end reporting.  Box 14 Changes: Introduction of Box 14b  Historically, Box 14 served as a flexible field used to report miscellaneous payroll information. For 2026 reporting, the IRS revised this section by dividing it into two fields.  Box 14a - “Other,” which continues to allow employers to report various informational items.  Box 14b - Treasury Tipped Occupation Code(s).  Employers reporting tips using Code TP must also include the applicable Treasury Tipped Occupation Code in Box 14b.  Why this matters  Employers with tipped employees may need to confirm that their payroll or HR systems can associate the correct occupation codes with the employees receiving tips. This may require coordination between HRIS job coding and payroll reporting.  What Changed on the 2026 Form W-4  The basic five-step structure of the Form W-4 remains the same. However, the IRS updated the form and related instructions to reflect new federal deduction provisions enacted under Public Law 119-21.  Key updates include:  A new checkbox allowing employees to indicate exemption from withholding.  Updated language in Step 4(b) describing how employees may account for certain deductions when determining withholding.  An updated deductions worksheet reflecting recent legislative changes.  Why this matters These changes primarily affect employees completing the form rather than employers administering payroll. Employers should focus on ensuring the correct version of the form is used and that completed forms are properly maintained.  Operational Considerations  Although the IRS changes focus mainly on reporting fields and withholding forms, organizations may want to review how payroll data flows across systems. Data elements such as tips, overtime classifications, and job-based eligibility may originate outside payroll and should align with year-end reporting outputs.  Many organizations address this by periodically reviewing exception reports, validating data inputs, and reconciling payroll outputs with source systems.  Supporting 2026 Payroll Readiness  As reporting requirements become more detailed, many organizations look beyond payroll processing alone and evaluate how data flows across systems, including timekeeping, HRIS, and year-end reporting outputs.  This is particularly relevant for 2026, where new reporting elements such as Box 12 codes for tips and overtime, as well as Box 14b occupation codes, may depend on data that originates outside payroll.  Organizations may choose to work with external providers to support areas such as data validation, workflow management, and employment-related compliance processes. This can include confirming system readiness, aligning data mappings, and improving visibility into payroll outputs before year-end filing.  Experian Employer Services provides solutions across areas including I-9 management, tax withholding, employment verification, and W-2 reporting. These capabilities can help support broader workforce compliance processes that intersect with payroll reporting.  Regardless of provider, responsibility for accurate reporting remains with the employer. Many organizations address this by reviewing internal processes, coordinating across systems, and validating outputs throughout the year.  Preparing for Year-End Reporting  For many organizations, preparing for W-2 reporting is an ongoing process rather than a year-end activity. Reviewing payroll data periodically throughout the year can help identify inconsistencies early and reduce the need for corrections during filing season.  This may include reviewing exception reports, validating key data elements such as tips and overtime classifications, and confirming that reporting outputs align with source systems.  Taking a proactive approach can help organizations better understand how 2026 reporting requirements apply within their environment and support a smoother filing process in early 2027. Explore how your organization can improve year-end readiness by speaking with one of our experts.

Mergers and acquisitions (M&A) can unlock growth opportunities—but they also bring complex employment tax challenges. Missteps in handling state unemployment insurance (SUI), succession status, and taxable wage carryovers can lead to costly penalties and compliance headaches. The good news? With proactive planning and clear processes, you can minimize risk and maximize tax benefits. Below are 15 practical tips for managing employment tax during M&A transactions. These guidelines are not a substitute for legal or tax advice. Before the Deal Closes 1. Gather Historical Data Best practices is to secure at least three years of wage and tax records, filings, and SUI rate notices for the target company. Obtain signed releases from target company officers to access agency records. 2. Confirm Deal Structure Is it a stock or asset transaction? If asset-based, is it partial or total? Will any officers transition to the new entity? 3. Lock Down Key Dates Document the transaction date and any employee migration dates. If employment continuity is broken, note the gap between last payroll at the target and first payroll at the new entity. Start Strong 4. Perform Succession Analysis Determine if you qualify as a successor employer for federal and state jurisdictions. Rules vary by state. 5. Notify Agencies Early Inform state and local agencies of changes in control, officers, or employing entity promptly. 6. Open New Accounts Establish new accounts (SUI, SIT, local taxes) in alignment with prior reporting. 7. Review SUI Transfer Rules Understand each state’s UI Transfer of Experience requirements and notify agencies immediately after the event. 8. Assess SUI Rate Impact Evaluate how the transfer of experience affects your unemployment insurance rate—up, down, or neutral. 9. Determine Taxable Wage Treatment Confirm if you can carry forward taxable wages from the target company for the current year. 10. Document Everything Send correspondence via certified mail with return receipt. Track all communications and store confirmations. 11. Get Written Confirmation Secure written agency confirmation for key decisions like succession status and transfer of experience. Clean Up Post-Close 12. Close Target Company Accounts Shut down local, state, and federal employment tax accounts promptly to avoid estimated liabilities. 13. Check for Credits Review target company accounts for unused tax credits or prior contributions that may be recoverable. 14. Clear Outstanding Balances Contact agencies to confirm there are no unresolved balances or reporting issues. Finish Strong 15. Follow Up Relentlessly Agency delays are common. Follow up by phone and in writing until all decisions are finalized and confirmed in writing. Bottom Line Employment tax compliance during M&A doesn’t have to be overwhelming. By following these steps—and partnering with experienced advisors—you can reduce risk, avoid penalties, and ensure a smooth transition.

On January 30, 2026, the Internal Revenue Service released the final General Instructions for Forms W-2 and W-3 for the 2026 tax year. While much of the guidance builds on prior years, the final instructions reflect several important updates tied primarily to Public Law 119-21, the One Big Beautiful Bill Act (OBBBA), along with refinements from the draft instructions issued earlier in January. For employers, payroll providers, and HR teams, the 2026 instructions introduce new reporting codes, expanded data elements, and clearer explanations around how certain types of compensation must be reported, even where the underlying tax treatment has not changed. As always, organizations should evaluate how these updates apply to their specific circumstances. Below is a high-level summary of the most notable changes in the final 2026 instructions. This overview is for informational purposes only. Big picture: more granular reporting, not less responsibility Many of the 2026 updates focus on how information is reported, rather than whether it is taxable. In several areas, particularly tips and overtime, the IRS makes clear that while new deductions may be available at the individual level, employer reporting and payroll tax treatment largely remain the same. The result is more detailed W-2 reporting and a greater emphasis on accurate classification and data capture. Expanded reporting for tips The 2026 instructions introduce new reporting requirements related to tipped wages. A new Box 12 code, TP, must be used to report the total amount of cash tips reported to the employer. Box 14 has been split into Box 14a (Other) and Box 14b, with Box 14b dedicated to reporting Treasury Tipped Occupation Code(s) when tips are reported using code TP. Despite the new deduction for qualified tips under OBBBA, the final instructions reiterate that tips are generally subject to federal income tax withholding and both the employer and employee share of Social Security and Medicare taxes when the twenty-dollar-per-month threshold is met. This distinction underscores that deductions available on an individual’s tax return do not change employer withholding and reporting obligations. New reporting code for qualified overtime The final instructions introduce Box 12 code TT for reporting qualified overtime compensation. The IRS added clearer language than what appeared in the draft instructions. Only overtime compensation required under the Fair Labor Standards Act qualifies, and only the premium portion of overtime pay is reported. For example, in a time-and-a-half scenario, only the additional half of the overtime rate is reported using code TT. As with tips, the IRS clarifies that overtime compensation is still generally subject to federal income tax withholding and payroll taxes, even though certain deductions may apply at the individual level. Wage reporting threshold increase For wages paid after calendar year 2025, the wage reporting threshold increases from six hundred dollars to two thousand dollars when no federal income tax, Social Security tax, or Medicare tax is withheld. The threshold will be indexed for inflation beginning after 2026. This change may reduce reporting in limited situations, but it does not eliminate W-2 filing requirements where withholding occurs. Box 14 structural changes To accommodate new reporting needs, Box 14 has been split into Box 14a (Other) and Box 14b (Treasury Tipped Occupation Code[s]). Box 9 was reduced in size to allow for additional Box 14a entries. These layout changes may require payroll system updates to ensure accurate formatting and data placement. Trump account reporting Public Law 119-21 introduces Trump accounts, a new type of individual retirement account for children under age eighteen. For 2026 reporting, employers must use new Box 12 code TA to report employer contributions made under a Section 128 Trump account contribution program. Employer contributions may begin July 4, 2026, subject to annual limits and income exclusion rules. The final instructions provide less detail than the draft and direct employers to Publication 15-A for additional guidance. What changed from the draft instructions Compared to the draft issued earlier in January, the final instructions shortened and streamlined the discussion of Trump accounts, clarified that tips and overtime remain subject to payroll taxes, and added a concrete example explaining how only the premium portion of overtime pay qualifies for reporting under code TT. A note on interpretation This overview is intended for informational purposes only. Employers and individuals should review the full IRS guidance and verify how the rules apply to their specific facts and circumstances. Looking ahead The 2026 W-2 and W-3 instructions reflect a broader trend toward more detailed wage reporting, particularly for compensation types that may be subject to special deductions or increased scrutiny. For organizations, the focus will be on ensuring systems, data flows, and classifications align with updated requirements well before year-end reporting. Experian continues to monitor regulatory developments to help organizations stay informed as reporting requirements evolve. Connect today to learn how you can streamline your year-end tax compliance tasks to save time and improve your workflow.

On January 9, 2026, the Internal Revenue Service finalized the 2026 Form W-2, Wage and Tax Statement, formally implementing reporting changes required under Public Law 119-21, also known as the One Big Beautiful Bill Act (OBBBA). The final form largely reflects changes previewed in earlier drafts, with one important clarification related to tipped occupation reporting. While the final instructions have not yet been released, a draft version is available, and the form itself is now official. Employers should begin preparing systems and processes to support these updates ahead of the 2026 filing season. Key Changes in the Final 2026 Form W-2 New Box 12 Codes The finalized 2026 Form W-2 introduces three new Box 12 codes tied directly to OBBBA provisions: TA – Employer contributions under a section 128 Trump account contribution program paid to a Trump account of an employee or a dependent of an employeeTP – Total amount of cash tips reported to the employer that may be eligible for the OBBBA deductionTT – Total amount of qualified overtime compensation These codes support new above-the-line deductions that employees will calculate as part of their individual income tax filings. Box 14 Is Now Split Into 14a and 14b Box 14a – Other: Employers may continue to report miscellaneous informational items such as state disability insurance taxes, union dues, uniform payments, health insurance premiums, educational assistance, or other non-taxable income. Box 14b – Treasury Tipped Occupation Code(s): Employers will report up to two Treasury-issued tipped occupation codes that identify whether an employee’s role qualifies for the deduction for qualified tips. These occupation codes are used in combination with Box 12 code TP to determine tip deduction eligibility. Clarification on Code “000” in Box 14b One notable clarification was added in the final W-2 employee instructions. Only when Box 14b reports code “000” by itself does it indicate that an employee’s tips are not eligible for the OBBBA tip deduction. This distinction is important for employees with multiple tipped roles or occupation codes, ensuring that eligibility is not incorrectly disallowed due to partial or mixed reporting. Distinguishing Deductible vs. Non-Deductible Tips Earlier drafts introduced new reporting mechanics that are now reflected in the final form. Code TP is used to report cash tips when the employer is not a specified service trade or business (SSTB), and those tips may qualify for the deduction. Code TS applies to tips that do not qualify for the deduction when the employer is an SSTB, as defined under Internal Revenue Code sections 199A and 1202. Employers must correctly classify their business type and tip eligibility to ensure accurate reporting. Territorial Forms The IRS also released finalized versions of Form W-2AS (American Samoa) and Form W-2GU (Guam) on January 12, 2026. The finalized Form W-2VI (U.S. Virgin Islands) was not immediately available at the time of release. What This Means for Employers With the 2026 Form W-2 now finalized, employers should begin reviewing payroll systems, tip reporting processes, and occupation coding practices to ensure alignment with the new requirements. While the form itself is final, the final instructions have not yet been issued, and employers should continue monitoring IRS guidance for additional clarification. Looking Ahead The finalized 2026 Form W-2 represents a significant shift in wage reporting, particularly for tipped and overtime compensation. These changes increase reporting precision and reinforce the connection between payroll data and employee tax benefits under OBBBA. Employers that prepare early by validating data flows, updating payroll logic, and educating internal teams will be best positioned for a smooth 2026 filing season. View the final 2026 Form W-2: https://www.irs.gov/pub/irs-pdf/fw2.pdf Learn how Experian Employer Services can help with your year-end tax process and more:

WOTC renewal is a hot topic leading up to its expiration. Learn about potential legislative solutions and how to prepare for the potential of retroactive credits.

The IRS has officially released the final 2026 Form W-4, Employee’s Withholding Certificate, incorporating updates from the One Big Beautiful Bill Act (OBBBA). Following the August draft, the finalized form confirms structural and numeric changes designed to align withholding with new deduction and credit provisions under the OBBBA. The finalized form expands the Deductions Worksheet, clarifies exemption procedures, and adjusts credit values to reflect the updated Child Tax Credit of $2,200 per qualifying child, up from $2,000. The layout now totals five pages (including instructions), up from four in 2025. Key 2026 updates: Step 3: Claim Dependent and Other Credits Split structure retained: Lines 3(a) and 3(b) remain separate for qualifying children and other dependents. New value applied: The Child Tax Credit rises to $2,200 per child under OBBBA, while the $500 credit for other dependents is unchanged. Step 4: Other Adjustments The optional label has been removed. Step 4 now clearly defines its subsections. Step 4(b) explicitly states that if left blank, withholding defaults to the standard deduction. Exemption checkbox added: Employees can now claim exempt from withholding via a formal checkbox and certification, replacing the old handwritten “Exempt” notation. Expanded Deductions Worksheet (Page 4) The worksheet grows, occupying its own page, and now includes new categories introduced by OBBBA: Qualified tips. If your total income is less than $150,000 ($300,000 if married filing jointly), enter an estimate of your qualified tips up to $25,000 Qualified overtime compensation: If your total income is less than $150,000 ($300,000 if married filing jointly), enter an estimate of your qualified overtime compensation up to $12,500 ($25,000 if married filing jointly) of the “and-a-half” portion of time-and-a-half compensation. Qualified overtime compensation. If your total income is less than $150,000 ($300,000 if married filing jointly), enter an estimate of your qualified overtime compensation up to $12,500 ($25,000 if married filing jointly) of the “and-a-half” portion of time-and-a-half compensation. Qualified passenger vehicle loan interest. If your total income is less than $100,000 ($200,000 if married filing jointly), enter an estimate of your qualified passenger vehicle loan interest up to $10,000. The worksheet retains traditional itemized categories (medical/dental, SALT, mortgage interest, charitable gifts) but now concludes with a limitation section and a refreshed standard deduction table. These additions directly mirror OBBBA’s new income-based deductions. Why this matters: The 2026 Form W-4 signals a shift toward greater precision and legislative alignment. Employees with variable pay—especially tips, overtime, or new car loans—can now fine-tune withholding through targeted deduction lines. Employers gain clearer data inputs for payroll accuracy and reduced rework. The checkbox for exemption simplifies verification and year-end tracking. The child credit increase ensures calculations match the higher benefit created under OBBBA. Employer checklist: Update HRIS/payroll fields to accommodate the expanded Step 4(b) deductions and new exempt checkbox. Refresh employee guidance—including onboarding instructions, FAQ content, and self-service portals—to explain the new lines. Validate withholding logic against 2026 tax tables once released. Communicate early—especially to employees with tips, overtime, or auto-loan interest deductions. Employees, what to know: If you earn tips or overtime, bought a new car, or are 65 or older, you may qualify for new deductions under OBBBA. Use the updated worksheet to reflect these items and avoid over withholding. The IRS withholding estimator (https://www.irs.gov/individuals/tax-withholding-estimator) remains the best way to validate accuracy throughout the year. Key takeaway: The final 2026 Form W-4 transforms the withholding certificate into a more granular, data-driven tool. It brings OBBBA’s deductions and credit changes directly into payroll operations and requires employers to review system fields and training materials now to stay ahead of 2026 implementation.

As employers close out another year and prepare to adjust for another year of regulatory updates, we are reminded of some items that loom large for this year and next: Changes to this year’s Affordable Care Act (ACA) reporting requirements and a new Form W-2 for next year. Below is a closer look at the changes and what your organization can do to stay ahead of the regulatory curve. Changes to ACA and 1095-C Requirements Late 2024, Congress passed an act designed to allow applicable large employers some flexibility in how they furnish forms 1095-C to their employees. Employers are no longer required to automatically send 1095-C forms to all full-time employees. Employers wishing to take advantage of the new process must instead follow the specific alternative notice methodology enacted under the 2024 laws. Essentially, employers are considered compliant if they have posted a “clear, conspicuous and accessible” notice on their benefits website informing employees that they may request a copy of the form and how they may do so. If such a copy is requested, the employer must provide the copy by either January 31 or within 30 days of the request, whichever is later. The deadline for furnishing the 1095-C or posting the notice as to how to obtain the form is March 2, 2026. Employers opting for the alternative methodology must post the “how-to” notice by that time and leave it posted through October 15, 2026. It is important to note that employers wishing to use the alternative furnishment methodology ensure they adhere to the guidance provided in IRS Notice 2025-15, which states that employers wishing to provide the requested form in electronic format, first obtain electronic consent from the employee, much as they would prior to providing an electronic W-2. New Form W-2 for 2026 In addition to changes to ACA reporting, the IRS recently released a draft Form W-2 for Tax Year 2026. The new form, which has already been edited three times, introduces new codes for Box 12, and a new box 14b to account for items introduced in the One Big Beautiful Act. The new codes are TA, for newly created “Trump Accounts”, TP, for reporting qualified tips, and TT, for reporting qualified overtime.While no changes were made to the W-2 for this tax year, employers can take some solace in the IRS announcement that no penalties will be levied regarding OBBA reporting for the current tax year. Compliance minded employers should review these items and adjust their processes accordingly. At a minimum, preparation should include a) updating employee communications regarding requesting Form 1095-C, b) coordinating with payroll providers/vendors to prepare for 2026 W-2 changes, and c) ensure they are monitoring the IRS website for any changes or updates.

Learn everything you need to know about the Work Opportunity Tax Credit (WOTC): benefits, eligibility, and application process for businesses.

Explore key changes in the draft 2026 Form W-4, including new deductions, credit updates, and exempt status options.

Discover key 2026 draft W-2 and W-2C changes—from new Box 12 codes to critical filing deadlines, along with compliance tips to succeed.

The IRS confirms for employers no changes to payroll forms or federal withholding tables for 2025 under the OBBBA.

Learn how to handle payroll taxes for out-of-state employees with this practical guide. Understand the challenges and get tips on staying compliant across state lines.

With the Military Wage Differential Credit, employers can receive tax credits in return for helping their service member employees on duty.

Learn how to differentiate between Form W-2 and Form W-4 to meet the necessary requirements and ensure payroll tax compliance.

Extension or expansion of the WOTC program is possible through several avenues. Whether it will be extended before its expiration remains to be seen.

Learn about the differences between Form W-2 vs Form 1099 to avoid worker misclassification, protect your business and avoid penalties.