IRS Draft Tax Forms for 2026

As the end of 2025 approaches, the Internal Revenue Service (IRS) has begun releasing draft tax forms for tax year 2026. These preliminary versions provide an early look at how upcoming changes—driven by inflation adjustments and provisions from the One Big Beautiful Bill Act (OBBBA)—will impact filing in 2027. Draft forms are available on the official IRS website at IRS.gov/draft-tas-forms, but remember: do not file draft forms. They are for planning and review only, and final versions may change.

This article breaks down the most important draft forms for 2026, highlighting key updates based on trusted IRS sources as of late 2025.

Draft Form 1040: U.S. Individual Income Tax Return for 2026

The core individual tax return, draft Form 1040, reflects standard inflation adjustments and references to apply estimated tax payments toward 2026 liabilities. It maintains a similar structure to prior years but incorporates lines for new deductions and credits introduced or enhanced by recent legislation.

  • Key features in the draft include references to qualified business income deductions and attachments for schedules like Schedule B (interest and dividends).
  • Taxable income calculations and total tax lines remain consistent, with placeholders for updated brackets and standard deductions.

For seniors, draft Form 1040-SR offers a larger-print alternative with similar updates.

New and Updated Schedules Tied to OBBBA Changes

The OBBBA introduced significant tax relief measures, including enhanced deductions for tips, overtime pay, car loan interest, and seniors. These are reflected in supporting forms:

  • Schedule 1-A (Form 1040): A new draft schedule for claiming additional itemized or above-the-line deductions under OBBBA, such as qualified tips and overtime compensation.
  • Expect dedicated lines for these popular new deductions, which aim to reduce taxable income for eligible workers.

Draft Form W-4: Employee’s Withholding Certificate for 2026

One of the most notable updates is the draft 2026 Form W-4, now expanded to five pages. Key changes include:

  • Increased Child Tax Credit amount (up to $2,200 per qualifying child, per OBBBA enhancements).
  • New lines in Step 4 for estimating qualified tip income and overtime compensation to adjust withholding accurately.
  • A dedicated checkbox for claiming exemption from withholding.
  • Updated deductions worksheet reflecting higher standard deductions and itemized options.

Similar updates appear in draft Form W-4P (for pensions/annuities) and Form W-4R (for nonperiodic payments).

Employers should note draft changes to Form W-2 (Wage and Tax Statement), including new Box 14 codes for reporting qualified tips and occupation codes to support the tip deduction.

Employment and Business Forms

  • Form 94x Series: Draft schemas and business rules for Modernized e-File (MeF) employment tax forms are available, aiding payroll providers in preparing for 2026 reporting.
  • Publication 15 (Circular E): Updated employer’s tax guide with 2026 withholding tables and social security/Medicare rates.

Inflation Adjustments for Tax Year 2026

The IRS has announced annual inflation adjustments affecting over 60 provisions, including:

  • Tax rate schedules.
  • Standard deductions.
  • Alternative Minimum Tax exemptions.
  • Increased limits for transportation fringes ($340/month) and health FSAs ($3,400).
  • Enhanced employer-provided childcare credit (up to $500,000–$600,000 for small businesses).

These are detailed in official IRS revenue procedures and news releases.

Why Review Draft Forms Now?

Reviewing these drafts helps taxpayers, employers, and tax professionals prepare for the 2027 filing season (starting around January 2027). Key benefits include:

  • Adjusting withholding via updated Form W-4 to avoid underpayment penalties.
  • Planning for new deductions to maximize refunds.
  • Ensuring payroll systems comply with reporting changes for tips and overtime.

Always check the official IRS site for the latest drafts and final forms. For personalized advice, consult a trusted tax professional.

Sources: IRS.gov Draft Tax Forms page, official PDFs (e.g., f1040–dft.pdf, fw4–dft.pdf), and IRS newsroom announcements on 2026 adjustments and OBBBA impacts (as of December 2025). Stay informed—major changes like these can significantly affect your 2026 taxes!