W-2 box 12 code TT and code TP: reading tips and overtime on your 2026 forms

New W-2 codes for 2026 forms

Starting with 2026 wages, employers report two new amounts in W-2 box 12. Code TT is the qualified overtime compensation you can use for the overtime deduction, and code TP is the qualified tips you can use for the tips deduction. A new box 14b shows the Treasury code for the tipped occupation you worked in.

These codes did not exist on 2025 W-2s. For 2025, the IRS left forms unchanged and let workers figure the amounts from box 7, Form 4070 tip reports, pay stubs or employer statements. That makes 2026 the first year most workers can copy numbers straight from the form.

What is W-2 box 12 code TT?

The amount next to W-2 box 12 code TT is your qualified overtime compensation: the part of overtime pay above your regular rate that the Fair Labor Standards Act requires. For time-and-a-half, that is one third of total overtime pay, not the whole overtime line on your pay stub.

The amount is already included in box 1 wages. Code TT does not mean the pay was untaxed or excluded; it tells you how much you may deduct later on Schedule 1-A. Social Security and Medicare tax were withheld on it as usual.

Checking the code TT figure

A nurse's aide paid $22 an hour who worked 260 FLSA overtime hours should see about $2,860 with code TT: $11 of premium times 260 hours. Her total overtime pay of $8,580 divided by 3 gives the same answer. If the W-2 shows $8,580 with code TT, the employer likely reported the whole overtime amount and the form should be corrected.

To turn the code TT amount into tax savings at your bracket, use our no tax on overtime calculator.

What is W-2 code TP?

W-2 code TP is the total of qualified tips your employer is reporting for the year, meaning tips received in an occupation that customarily got tips on or before December 31, 2024. Cash and charged tips you reported to the employer both count. The tips deduction is capped at $25,000.

Box 14b tipped occupation code

Box 14b shows the Treasury tipped occupation code for your job, such as a code for restaurant servers or hair stylists. If it is blank but box 12 shows code TP, ask payroll to confirm. The full list is covered on our tipped occupations list page.

1099 qualified tips box and overtime boxes for contractors

Independent contractors and gig workers receive the same information on 1099 forms. From tax year 2026, payers use new boxes to split out qualified amounts.

Self-employed tip earners can deduct qualified tips only up to the net profit of the business that received them. A self-employed hair stylist with $3,400 in 1099-K box 1c but $2,100 of net profit on Schedule C can deduct $2,100.

What to do if the amount is missing

Employers must send 2026 W-2s by the end of January 2027. Because January 31, 2027 falls on a Sunday, the practical deadline is Monday, February 1. Once you have the form, check it against your final pay stub.

1. No code TT but you worked FLSA overtime: ask payroll whether they report it and request a Form W-2c if it was left off.
2. Code TT equals your full overtime pay: ask for a W-2c showing only the premium.
3. Employer will not correct it: keep pay stubs showing hours and rates, figure the premium yourself, and keep those records with your return.
4. You are an exempt salaried employee: no code TT should appear, because the FLSA did not require your overtime.
5. Tips missing from code TP: confirm you reported all tips to your employer; unreported cash tips go through Form 4137.

Using the numbers on Schedule 1-A

The W-2 and 1099 figures are starting points, not the deduction itself. Schedule 1-A applies the caps ($25,000 for tips, $12,500 or $25,000 joint for overtime) and cuts each by $100 per full $1,000 of modified AGI above $150,000 ($300,000 joint).

Our Schedule 1-A walkthrough shows which lines take each amount, based on the 2025 form; the 2026 version had not been released as of September 2026. Other new items on 2026 returns, including the Form 4547 election for Trump accounts, are summarized in One Big Beautiful Bill tax changes.