If you recently received your 2025 Form W-2 and noticed unfamiliar entries in Box 14, you are not alone. As I was filling out our tax return this year, I noticed something odd in Box 14 of my wife’s W-2 that I had not seen before: “OBBBTT” (followed by a dollar amount). With zero clue as to what it meant, I started with some research, and it expanded into an overview of the new OBBBA qualified tip and overtime deduction reporting, which I’ll share below.
This article will explain OBBBA qualified overtime and tips deductions basics, what Box 14 is on Form W-2, why it now includes “OBBB” or “OBBBA” labels, how taxpayers should use this info when filing their federal income tax returns, and how to calculate qualified overtime if you were not provided this information.
What Is Box 14 on the W-2?
Let’s start with the basics on Box 14 on Form W-2. Box 14 is labeled as “Other”. Unlike most W-2 boxes, it is not standardized by the IRS. Employers use it to report informational items that do not fit elsewhere on the form.
Common Box 14 entries have historically included union dues, state disability insurance, health insurance premiums, or other payroll-related amounts. Because the IRS does not mandate specific codes, employers are free to use their own labels, which can make things confusing. If you are not sure what a specific label means – definitely check with your employer to confirm.
The OBBBA Qualified Overtime & Tips Basics
The “One Big Beautiful Bill Act (OBBBA)” legislation that was passed into law last year, introduced some new (and temporary) federal tax deductions for certain types of income, along with new employer reporting practices that often show up in this historically confusing box.
The OBBBA created 2 new above-the-line deductions for specific categories of income:
- Qualified Overtime Compensation: generally referring to the premium portion of overtime pay (e.g. the additional pay above an employee’s regular rate). Qualified overtime pay may be eligible for a deduction of up to $12,500 per taxpayer from 2025 through 2028. There are modified adjusted gross income (MAGI) phaseouts starting at $150,000 (single), $300,000 (married filing jointly).
- Qualified Tips: generally referring to tips properly reported to an employer that meet specified IRS eligibility rules. Workers in certain specified professions can now deduct up to $25,000 per year on tips from 2025 though 2028. As with qualified overtime compensation, here are MAGI phaseouts for qualified tips starting at $150,000 (single), $300,000 (married filing jointly).
OBBBA Qualified Overtime & Tip Reporting in W-2, Box 14
To help employees and tax preparers identify these amounts, many employers now voluntarily report qualified overtime and tip figures in Box 14 for tax year 2025. These entries may appear under employer-defined abbreviations such as “QUAL OT,”, “OBBBTP, “OBBBTA, “OBBBTT”, “FLSA OT,” or other OBBBA-related codes. Here’s a breakdown on what they typically mean:
| W-2 Box 14 Code | What It Means | How to Use on Your Tax Return |
|---|---|---|
| OBBBTP | Total amount of cash tips reported to the employer. “Cash tips” includes tips received in cash, charged, or under a tip-sharing arrangement. | Use this amount when determining the qualified tip deduction in Part II of Schedule 1-A (Form 1040). |
| OBBBTT, FLSA OT, or QUAL OT:: | Total amount of qualified overtime compensation. If "OBBBT", this is the total amount of qualified overtime compensation under the OBBBA. | Use this amount when determining the qualified overtime compensation deduction in Part III of Schedule 1-A (Form 1040). |
| OBBBTA: | Employer contributions under a section 128 Trump account contribution program paid to a Trump account of an employee or a dependent of an employee. You likely won't see this until 2026 W2s are released. | Generally informational and not used anywhere on Form 1040. Does not impact your tax return. |
| Other employer-specific codes: | Could include union dues, health insurance, state disability | Generally informational — confirm with employer and include only if deductible. |
What Box 14 Entries Mean for Your Tax Filing
Box 14 amounts do not automatically change your taxable income. Instead, they serve as supporting information when determining whether you qualify for the new OBBBA deductions.
Importantly, these amounts are not tax-free wages. Overtime pay and tips remain subject to normal payroll withholding, including Social Security and Medicare taxes. Any tax benefit from OBBBA occurs only when you file your annual return and potentially deduct certain qualified income.
How to Use Box 14 Information when Filing
When preparing your tax return, Box 14 entries should be reviewed carefully. If they reference overtime or tips, they may help you calculate your allowable tax deductions under the OBBBA changes when filling out the newly created Schedule 1-A Form as part of your 1040 (full Schedule 1A instructions found here).
Because Box 14 codes are not standardized, taxpayers should confirm unclear abbreviations with their employer or payroll department. Keeping pay stubs and payroll summaries is also helpful if questions arise.
The best tax software (or tax preparers) will walk you through entering this information and how to handle OBBBA deductions when provided with the information on your W-2.
What if I Received Qualified Tips or Overtime Pay, but Don’t Have Anything in Box 14?
My wife was a lucky one. Her employer included qualified overtime in her Form W-2, Box 14. Not everyone will be so lucky.
Unfortunately, for the 2025 tax year, employers were not required to break out qualified overtime or tips versus regular pay on W-2 or 1099 forms. Any Box 14 OBBBA reporting for 2025 is voluntary from employers. If your employer did not separate it, you’ll need to calculate qualified overtime or tips on your own using an end-of-year payroll statement or other reporting. Some of this reporting will become more standardized and mandatory for 2026 through 2028.
For qualified overtime premiums, the IRS has provided some guidance. In short:
- For overtime pay at 1.5X regular pay rate: divide the lump sum by 3 to get the qualified overtime amount
- For overtime pay at 2.0X regular pay rate: divide the lump sum by 4 to get the qualified overtime amount
Key Takeaways on W-2 Box 14
- For 2025, box 14 is a voluntary informational section and employers have discretion over the labels that they use – check with your employer to confirm what an entry means if you are not sure.
- New Box 14 entries this year reflect qualified overtime or tip income under the OBBBA.
- These amounts may support new federal deductions when filing your return.
- Deductions reduce taxable income but do not affect payroll taxes.
Bottom line: you do not want to miss new potential tax savings created by the OBBBA. Review your W-2 carefully, keep accurate payroll records, and seek help if you need to. Check out my DIY tax guide for more tax filing basics and seek help from a tax professional, if needed.
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