taxlumo

W-2 box 12, code TT: your qualified overtime

Starting with 2026 W-2s, code TT is the number your overtime deduction depends on.

Updated October 2, 2026 · Tax years 2025 and 2026 · Based on IRS guidance

From tax year 2026, the number that decides your overtime deduction is printed on your W-2. Here's how to read it.

What box 12, code TT shows

Box 12 code TT is the qualified overtime compensation your employer paid during the year: the portion of overtime above your regular rate that the Fair Labor Standards Act requires. It isn't your total overtime pay. If you earned $30,000 of time-and-a-half overtime, code TT would show about $10,000.

Why it matters in 2026

  • The IRS's August 6, 2026 FAQs say that for tax years after 2025 you generally may deduct only the amount reported in box 12, code TT.
  • If your employer leaves it out or understates it, you need a corrected Form W-2c before you can claim more.
  • A substitute W-2 (Form 4852) can't be used to claim overtime your employer didn't report.
  • Contractors paid overtime report it on Form 1099-NEC box 1d or Form 1099-MISC box 14.

What to do before year-end

  1. Check a recent pay stub to see whether your employer tracks “qualified overtime” separately.
  2. Estimate your deduction with the overtime calculator.
  3. If you expect a large deduction, consider a new Form W-4 so less tax is withheld from each check.
  4. When your W-2 arrives in January 2027, compare code TT with your own estimate and ask for a W-2c if it looks wrong.

Common questions

What does code TT mean on a W-2?

Code TT in box 12 is the total qualified overtime compensation your employer paid you in the year: the FLSA-required premium that you can deduct on Schedule 1-A.

What if my W-2 has no code TT?

For tax year 2026 and later you generally can't deduct overtime that isn't reported there. Ask your employer for a corrected Form W-2c. For tax year 2025 employers didn't have to report it separately, so you could work it out from your pay stubs.

Can the box 12 TT amount be more than $12,500?

Yes. Employers report everything they paid, even above the cap. You deduct at most $12,500 ($25,000 joint), reduced by the phase-out.

What is code TP?

Code TP reports qualified tips. It's the tips counterpart to code TT.

Sources

See how Taxlumo calculates for every formula and test case.