Check your W-2 box 12: codes TP and TT, tax year 2026

What codes TP and TT mean

Box 12 of the 2026 Form W-2 lists amounts by a letter code. Code TP is the total amount of cash tips you reported to your employer. Code TT is the total amount of qualified overtime compensation: the pay above your regular rate that the federal law (FLSA) requires, so only the half of time and a half, never the whole overtime pay.

Box 14b is new on the 2026 form. When there is a TP amount, it holds the Treasury Tipped Occupation Code of the job where you got the tips, up to two codes, such as 102 for wait staff or 101 for bartenders. A code of 000 means some of the tips came from a job that is not on the IRS list of tipped occupations, and those tips are not qualified tips.

Tips and overtime are still subject to income tax withholding and to Social Security and Medicare taxes. The codes only show the amounts the two deductions start from.

Sources: IRS, 2026 General Instructions for Forms W-2 and W-3; IRS, occupations that customarily received tips

How much of each you can deduct

Tips: up to $25,000 on any return, joint included. Overtime: up to $12,500, or $25,000 on a joint return. Both shrink by $100 for each full $1,000 of modified adjusted gross income over $150,000, or $300,000 on a joint return. The deductions apply to tax years 2025 through 2028.

Tips count when they are voluntary cash or card tips received in an occupation on the IRS list. For both deductions, the person who got the pay needs a Social Security number valid for work, and a married couple must file a joint return.

Sources: IRS, FS-2025-03, Tax deductions for working Americans and seniors; IRS, 2026 Schedule 1-A (Form 1040), draft

A worked example

A server’s 2026 W-2 shows TP 9800.00 and TT 1650.00 in box 12, and 102 in box 14b. She is single, her modified adjusted gross income is $52,000 and her top bracket is 12%. The TT amount is the half of time and a half: 150 overtime hours at a regular rate of $22 are $11 × 150 = $1,650.

Both amounts are under their caps and her income is under $150,000, so the tips deduction is $9,800 and the overtime deduction is $1,650, $11,450 in all. In the 12% bracket they save about $1,176 and $198, about $1,374 of federal income tax.

Sources: IRS, 2026 General Instructions for Forms W-2 and W-3; IRS, 2026 Schedule 1-A (Form 1040), draft

If a code is missing or wrong

Employers must give you the 2026 W-2 by February 1, 2027. If it is missing, or TP or TT is missing or wrong, ask your employer for a corrected form, Form W-2c. If you still do not have it by the end of February, you can call the IRS at 800-829-1040: it contacts the employer and sends you Form 4852, a substitute for Form W-2 on which you estimate the amounts. If the W-2 that arrives later differs from your estimate, you file an amended return, Form 1040-X.

Tips you did not report to your employer are not in TP. You report them yourself on Form 4137 with your return, and Schedule 1-A takes, for each employer, the larger of the qualified tips in TP and those on Form 4137.

A W-2 with no TT can be right: overtime that only a state law requires, such as daily overtime in California, is not qualified overtime. For tax year 2025 employers did not have to report the amounts separately; for 2026 they must. The IRS pages this guide checked give no way to work out 2026 overtime yourself when TT is left off, so this guide gives none: ask for the W-2c.

Sources: IRS, Topic no. 154, Form W-2 and Form 1099-R (what to do if incorrect or not received); IRS, 2026 General Instructions for Forms W-2 and W-3; IRS, questions and answers on the deduction for qualified overtime compensation; IRS, 2026 Schedule 1-A (Form 1040), draft

Where the amounts go on the return

On the 2026 draft of Schedule 1-A (Form 1040), line 4 of Part II takes the tips of each employer and line 16 of Part III takes the TT amount of each employer, with the employer identification number of box b. The total of the schedule goes to Form 1040, line 13a. Line numbers can change when the IRS publishes the final form.

You can take both deductions whether you itemize or take the standard deduction.

Sources: IRS, 2026 Schedule 1-A (Form 1040), draft; IRS, FS-2025-03, Tax deductions for working Americans and seniors

The example W-2, worked out

The amounts are the no tax on tips and no tax on overtime calculators’ own, for a single filer with a modified adjusted gross income of $52,000.

The tax saved is an estimate: the deduction times the bracket.