Understanding W-2 Box 14b: Reporting Tipped Income
Senior Finance Writer · 6/27/2026
W-2 Box 14b is a critical section on the W-2 form that employers use to report tipped income to employees. According to the Internal Revenue Service (IRS), employers must report any additional compensation paid to employees, including tips, in excess of the $20,000 annual limit in W-2 Box 14b (Form W-2, Instructions, Box 14b, 2022). This box is also known as the 'Other reportable compensation' box. The deadline for reporting tipped income in W-2 Box 14b is January 31st of each year.
What is W-2 Box 14b?
W-2 Box 14b is a section on the W-2 form used by employers to report tipped income to employees. It is also known as the 'Other reportable compensation' box. This box is used to report any additional compensation paid to employees, including tips, in excess of the $20,000 annual limit. For example, consider a restaurant server who receives $15,000 in tips and $20,000 in additional compensation. The employer must report the entire $35,000 in W-2 Box 14b.
Tipped income includes tips received directly from customers, as well as any additional compensation paid to employees for work performed in a tipped occupation. According to the IRS, employers must report any additional compensation paid to employees in excess of $20,000 in a calendar year in W-2 Box 14b (26 CFR 31.6051-1(a)(3)). This includes not only tips but also other forms of compensation, such as bonuses or overtime pay.
Reporting Tipped Income in W-2 Box 14b
Employers must report tipped income in W-2 Box 14b if the employee's total tipped income exceeds the $20,000 annual limit. The IRS requires employers to report tipped income in W-2 Box 14b using Form 8027, which is the employer's annual information return of tipping income and allocations (Form 8027, Instructions, 2022). Employers must also provide employees with a copy of their W-2 form by January 31st of each year.
To complete W-2 Box 14b, employers must report the total amount of tipped income in excess of the $20,000 annual limit. This includes any tips received directly from customers, as well as any additional compensation paid to employees for work performed in a tipped occupation. For example, consider a bartender who receives $25,000 in tips and $5,000 in additional compensation. The employer must report the entire $30,000 in W-2 Box 14b.
Completing W-2 Box 14b: FAQs
What is the deadline for reporting tipped income in W-2 Box 14b?
The deadline for reporting tipped income in W-2 Box 14b is January 31st of each year.
Do I need to report tipped income in W-2 Box 14b if my employee's tipped income is below the $20,000 annual limit?
No, you do not need to report tipped income in W-2 Box 14b if your employee's tipped income is below the $20,000 annual limit.
How do I report additional compensation paid to employees in excess of the $20,000 annual limit?
You must report any additional compensation paid to employees in excess of $20,000 in W-2 Box 14b.
Key Takeaways
Key takeaways
- W-2 Box 14b is used to report tipped income in excess of the $20,000 annual limit.
- Employers must report tipped income in W-2 Box 14b if the employee's total tipped income exceeds the $20,000 annual limit.
- The deadline for reporting tipped income in W-2 Box 14b is January 31st of each year.