W-2 Box 12 Codes TP and TT: Tips and Overtime Reporting
Starting with tax year 2026, employers must report qualified overtime on Form W-2, box 12, code TT, and cash tips in box 12, code TP, per the 2026 W-2 instructions and IRS FAQs.
Is the box 12 TT amount my deduction?
Not necessarily. The IRS says TT is the total qualified overtime (the FLSA premium above your regular rate) your employer paid. Schedule 1-A then applies the $12,500/$25,000 cap and the income phase-out. Example from the IRS: an employee paid $30,000 of qualified overtime gets $30,000 in TT, even though the cap is $12,500.
What if my 2025 W-2 shows nothing?
That's expected. Under Notice 2025-69 transition relief, employers didn't have to separately report these for 2025. Some reported them voluntarily in box 14 or a separate statement. You can figure the amount from pay records.
What if box 12 TT is wrong?
The IRS says the employer must issue a corrected Form W-2c. Ask your payroll department.
Sources
- IRS Fact Sheet FS-2025-03: tax deductions for working Americans
- 26 U.S. Code § 224 – Qualified tips and § 225 – Qualified overtime compensation
- IRS FS-2026-13: overtime deduction Q&A
- Public Law 119-21 (congress.gov)
→ Estimate your deduction with the free calculator
More guides
- 7 Common Mistakes Claiming No Tax on Tips or Overtime
- How to Claim No Tax on Tips and Overtime on Your Return (Schedule 1-A)
- No Tax on Tips: Federal Rules Explained (2025–2028)
- No Tax on Overtime: How Much Will I Save? Real Examples
- No Tax on Tips & Overtime Phase-Out Explained (MAGI $150,000 / $300,000)
- What Counts as Qualified Overtime for the No Tax on Overtime Deduction
- No Tax on Tips for Self-Employed and Gig Workers
- Does No Tax on Tips Apply to State Taxes?
- Which Jobs Qualify for No Tax on Tips? Eligible Occupations