W-2 Box 12 Codes TP and TT: Where Your Tips and Overtime Numbers Come From (2026)

If you are preparing your 2026 tax return and you saw two new boxes on your W-2 labeled TP and TT in Box 12, you are not imagining them. Under the IRS 2026 draft Schedule 1-A, employers report qualified tips and qualified overtime premium pay so that you can use those exact numbers when you calculate your self-employment tax on Schedule SE.

This guide explains what each code means, where the numbers go on Schedule 1-A, and what to do if your W-2 is missing one of them. It is based on the draft form posted on September 4, 2026. Final forms may differ.

The short version

• TP is the total amount of qualified tips your employer reports in Box 12. It flows to Schedule 1-A, Part II, line 4a.
• TT is the qualified overtime premium. It is the portion of overtime that exceeds your regular rate, required under the Fair Labor Standards Act. It flows to Schedule 1-A, Part III, lines 16a through 16e.

These codes are new for the 2026 tax year. Their purpose is to help you avoid re-adding income that you are allowed to subtract, and to make sure your tip and overtime numbers on Schedule SE match your W-2.

Code TP: qualified tips

TP reports your total qualified tips for 2026. These are cash and non-cash tips you received in an IRS proposed tipped occupation, such as food service, lodging, and similar roles. Your employer totals them and reports the figure in Box 12 under code TP.

On Schedule 1-A, you enter that number in Part II, line 4a. Line 4a is used to reduce the wages reported in Box 1 of your W-2 for self-employment tax purposes, so you are not taxed twice on the same tip income.

If you also filed Form 4137 because you did not report all of your tips on your regular wages, line 4b applies. In most cases, you use whichever number is larger between line 4a (from TP) and line 4b (from Form 4137). This guide will not go into that calculation, but be aware that both numbers may appear on your return.

What if TP is missing or wrong?

• Ask your payroll or HR department for the correct total of your tips for 2026.
• Keep a tip diary or log, plus copies of your paystubs and any written tip records.
• Check the draft transition rules published with the September 4, 2026 form. They explain how to handle the first year of this reporting requirement if your employer did not include code TP.
• If your employer cannot produce a number, report what you know from your own records and attach a brief explanation with your return.

Even if your W-2 does not show TP, you still report your tips where they belong. This guide is not a substitute for professional advice, and the records guide linked from our navigation has more detail on how to document tip income.

Code TT: qualified overtime premium

TT is different from regular overtime pay. It is only the premium portion of overtime that exceeds your regular hourly rate, and only when that premium is required under the Fair Labor Standards Act. It is the extra half-rate or more that you earn on top of your normal pay, not your full double-time wage.

On Schedule 1-A, TT is broken out in Part III, lines 16a through 16e. Your employer may combine different methods of calculating the premium into a single total in Box 12 under code TT. If you were paid double time, the number in TT is not your total double-time pay. It is only the premium share above your regular rate.

Examples

• If your regular rate is $20 and you worked overtime at time-and-a-half, the premium portion is $10 per hour.
• If you were paid double time, the premium portion is still only $20 per hour, which is what goes into TT. The base portion remains in Box 1 and Box 3 as usual.

If your employer combines several methods for calculating the premium, they should still report a single TT total. Compare it with your paystubs. If the number looks too high or too low, ask payroll for the breakdown before you file.

Self-employed and 1099 versions

If you work for yourself and receive tips through a 1099 form rather than a W-2, the reporting looks different. Tips you receive are generally reported in the tips box on the 1099-NEC, 1099-MISC, or 1099-K you were issued.

For self-employment tips, look for the tips box on the form you received. If you are unsure which box applies, the records guide explains how to identify tip income from 1099-NEC, 1099-MISC, and 1099-K forms.

• 1099-NEC box 1(b) and similar tip boxes on other forms may carry tips received by a contractor.
• 1099-NEC box 1(d) is one place where overtime premium amounts may appear for self-employed workers.
• 1099-MISC box 14 is another place to look for overtime premium pay.

These contractor forms do not replace the W-2 TP and TT codes, but they serve a similar purpose when you do not receive a W-2. Report the amounts on Schedule SE where the form instructions direct you, and keep the forms as part of your tax records.

Where these codes go on Schedule 1-A

The table above shows the main destination for each code on the 2026 draft Schedule 1-A. If your employer includes 1098-VLI in Box 12, it may contain additional voluntary information, which is recorded in Part IV.

What if your W-2 has no TP or TT?

Not all employers have set up their payroll systems to include TP or TT yet. Some are phasing these codes in during 2026. If your W-2 does not show them, that does not mean you owe more or less tax. It means you still need to figure the numbers yourself from your records.

• Keep all your paystubs for 2026.
• Use the estimate method described in our records guide to reconstruct your tip and overtime premium totals.
• Enter the amounts you can substantiate on Schedule 1-A, even if the W-2 does not show code TP or TT.

The goal of these codes is accuracy, not new income. When your W-2 is correct, you can enter the numbers directly. When it is missing or wrong, you still claim what you are owed using your own documentation.

Want to try the numbers?

If you have your W-2 in front of you, try entering the amounts into the S1A Calculator on the home page. It is a quick way to see how code TP and code TT affect your Schedule SE and your overall tax.