W-2 Box 12 Code TT Explained: Your Overtime Deduction (2026)
That new 'TT' on your W-2 is your overtime deduction. Here's what it means and how to use it.
Box 12 code TT on your W-2 reports your total qualified overtime compensation — the FLSA premium portion you can deduct under the No Tax on Overtime deduction. It's new for tax year 2026 W-2s (the ones you'll receive in January 2027). Code TP reports your cash tips, and Box 14b reports your Treasury Tipped Occupation Code. For tax year 2025, employers weren't required to report code TT, so you calculate the premium yourself.
The IRS updated the W-2 to support the new OBBBA deductions. The one to know for overtime is Box 12 code TT. It shows the total qualified overtime compensation your employer paid you — meaning the FLSA 'half' premium, already isolated from your base pay. That number is what flows to Schedule 1-A as your overtime deduction, subject to the caps and phase-out.
Timing is the key wrinkle. Separate reporting is required starting with tax year 2026, so the first W-2s that show code TT arrive in January 2027. For the 2025 tax year, the IRS granted transition relief, and many employers didn't break out the premium — so you'll compute it from your pay records.
Preview your overtime deduction
The three new W-2 fields at a glance
| Field | What it reports | Used for |
|---|---|---|
| Box 12, code TT | Qualified overtime premium (the FLSA 0.5×) | No Tax on Overtime deduction |
| Box 12, code TP | Total cash tips reported to employer | No Tax on Tips deduction |
| Box 14b | Treasury Tipped Occupation Code (TTOC) | Confirms your tip-eligible occupation |
What to do if code TT is missing or looks wrong
- For a 2025 W-2: code TT may be blank — that's expected. Calculate your premium from pay stubs (overtime rate minus regular rate, times overtime hours).
- For a 2026 W-2: if code TT is blank but you worked FLSA overtime, ask your employer or payroll provider to confirm — they're required to report it.
- If the figure looks like your total overtime wages rather than just the premium, flag it. Only the premium half should appear in code TT.
- Keep your final pay stub of the year; it's the best cross-check against the W-2 figure.
From code TT to your actual deduction
Code TT is the raw premium. Your deduction is that amount capped at $12,500 (single) / $25,000 (joint), then reduced by the income phase-out above $150,000 / $300,000 MAGI. Use the preview above to turn the Box 12 figure into an estimated deduction and tax saving.
Frequently asked questions
What is code TT on my W-2?
Code TT in Box 12 reports your total qualified overtime compensation — the FLSA premium (the extra half-time above your regular rate). It's the starting figure for the No Tax on Overtime deduction on Schedule 1-A.
Why doesn't my 2025 W-2 have a code TT?
For tax year 2025, the IRS didn't require employers to separately report qualified overtime, so many 2025 W-2s omit code TT. Calculate your premium yourself from pay stubs. Separate reporting is required starting with tax year 2026 W-2s.
What's the difference between code TT and code TP?
Code TT is your qualified overtime premium (for the overtime deduction). Code TP is your total reported cash tips (for the tips deduction). Box 14b separately shows your Treasury Tipped Occupation Code.
Is the amount in code TT my deduction?
Not exactly. Code TT is the premium before limits. Your actual deduction caps it at $12,500 (single) / $25,000 (joint) and reduces it by the income phase-out above $150,000 / $300,000 MAGI.
IRS sources & verification
Last reviewed July 12, 2026.