Form W-2 · tips and overtime
Where tips and overtime show up on your W-2
Starting with the 2026 Form W-2, employers report cash tips in box 12 with code TP, qualified overtime in box 12 with code TT, and tipped-occupation codes in the new box 14b. The 2025 W-2 had none of these, so 2025 returns use the workarounds in Notice 2025-69.
The new boxes on the 2026 Form W-2
| Box | What it reports | What to know |
|---|---|---|
| Box 12, code TP | Total amount of cash tips reported to the employer | “Cash tips” includes tips received in cash, charged, or under a tip-sharing arrangement. The W-2 instructions tell you to use this amount in Part II of Schedule 1-A. |
| Box 12, code TT | Total amount of qualified overtime compensation | Only the FLSA-required pay above the regular rate, such as the “half” of time-and-a-half. The employer reports the full amount even above the $12,500 deduction cap. Use it in Part III of Schedule 1-A. |
| Box 14b | Treasury Tipped Occupation Code(s) | Up to two three-digit codes for the occupations the tips were received in. If any tips came from a non-qualifying occupation, the employer must include “000.” If 000 is the only code, the tips are not qualified tips. |
| Box 14a | Other | The old box 14. It still holds items like union dues or state disability insurance. It is no longer where tips or overtime for the deduction are reported. |
Also new in box 12 for 2026: code TA, employer contributions to a Trump account.
2025 returns: no codes, so use these instead
The IRS left the 2025 Form W-2 unchanged and gave employers penalty relief for not breaking out tips and overtime (Notice 2025-62). Employers were encouraged, not required, to give a separate figure, for overtime possibly in box 14. Notice 2025-69 then told workers what they can use:
Tips (2025)
- Social security tips in Form W-2 box 7, or
- the total on the Forms 4070 (or substitute) you gave your employer each month, or
- an amount your employer voluntarily reported in box 14 or on a separate statement,
- plus unreported tips you include on Form 4137, line 4.
If W-2 boxes 3 and 7 together equal $176,100 (the 2025 social security wage base), box 7 may not include all your tips; the notice points you to your Forms 4070. Self-employed workers can rely on records such as daily tip logs.
Overtime (2025)
- A pay statement or box 14 entry that shows the overtime premium: use that amount.
- A statement that shows only total time-and-a-half overtime pay: use one-third of it ($15,000 → $5,000).
- Overtime paid at double time: use one-fourth of the total ($20,000 → $5,000), because only the FLSA-required half counts.
The overtime calculator does the hours × rate × ½ math if you know your hours and regular rate.
2026 and later: the W-2 is the limit
The 2025 relief is not extended. The IRS overtime FAQs (FS-2026-13, August 6, 2026) say that for tax years after 2025 an employee may not use more qualified overtime than box 12 code TT shows. If the number is missing or too low, the fix is a corrected Form W-2c from the employer; a substitute Form 4852 does not satisfy the statute.
Before you file, check three things on the W-2:
- Code TT is only the premium. If it looks like your whole overtime pay, ask payroll how it was figured.
- If you get tips, box 14b has a code that matches your job on the IRS occupation list, not just “000.”
- Box 1 still includes the tips and overtime. That is expected; the deduction comes later on Schedule 1-A.
Questions
What does code TT in box 12 of my W-2 mean?
Code TT is the total qualified overtime compensation your employer paid you: the overtime pay required by section 7 of the Fair Labor Standards Act that is above your regular rate, such as the extra half of time-and-a-half. It is new on the 2026 Form W-2. The amount is not automatically your deduction; Schedule 1-A applies the $12,500 ($25,000 joint) cap and the income phaseout.
What does code TP in box 12 mean?
Code TP is the total cash tips you reported to your employer, including charged tips and tips from a tip pool. It is new on the 2026 Form W-2. You use it with the occupation code in box 14b to figure the tips deduction in Part II of Schedule 1-A, which caps it at $25,000 and phases it out over $150,000 of MAGI ($300,000 joint).
What is box 14b on the 2026 W-2?
Box 14b holds up to two Treasury Tipped Occupation Codes for the jobs you received tips in. The codes come from the IRS list of occupations that customarily and regularly received tips on or before December 31, 2024. If the only code shown is 000, the IRS says your cash tips are not qualified tips and you should not use the box 12 code TP amount for the deduction.
My 2025 W-2 has no TP or TT code. Can I still claim the deductions?
Yes, if you otherwise qualify. The 2025 Form W-2 was not changed. Notice 2025-69 lets employees use Form W-2 box 7, the Forms 4070 they gave their employer, an amount an employer voluntarily put in box 14 or a separate statement, plus Form 4137 line 4 for tips. For overtime it allows a pay statement showing the premium, or a total overtime figure divided by 3 for time-and-a-half (by 4 for double time).
What if my employer left overtime off my 2026 W-2 or understated it?
Ask for a corrected Form W-2c. The IRS overtime FAQs (FS-2026-13) say that for tax years after 2025 you may not use more qualified overtime than what box 12 code TT shows, and that a substitute Form 4852 does not count. If the employer overstated code TT, you may only use the overtime actually paid.
Does code TT or TP mean the money is not taxed?
No. Tips and overtime are still wages. They stay in box 1 and remain subject to federal income tax withholding and social security and Medicare tax. The benefit is a deduction you take on Schedule 1-A when you file. For 2026 you can give your employer a new Form W-4 (step 4(b)) to account for the expected overtime deduction.