W-2 Box 12 Code TP: The New Tip Boxes on Your 2026 W-2, Explained

Published October 10, 2026

Your W-2 for 2026 is going to look a little different, and if you work for tips, the changes are about you. There's a new code in box 12, TP, and a new box, 14b, with a three-digit number in it. Together they're the receipt for the No Tax on Tips deduction: how much in tips you reported, and what job you earned them in.

Here's what each one means, what's in it and what isn't, and what to do when the number on your W-2 doesn't match the number in your head.

What changed on the 2026 W-2

Three things, all on the right half of the form:

• Box 12 has a new code, TP, for the total tips you reported to your employer. (It has two other new codes, TT for overtime pay and TA for Trump account contributions, which aren't about tips.)
• Box 14 is now two boxes. 14a, “Other,” holds whatever box 14 used to. 14b, “Treasury Tipped Occupation Code(s),” is new.
• Everything else about tips works like before. Box 1 still adds your tips to your pay, box 7 still shows tips for Social Security, and box 8 still shows allocated tips.

Box 12, code TP: the tips you reported

The IRS's instructions to employers describe code TP in eight words: “Total amount of cash tips reported to the employer.” Two of those words need translating.

“Cash tips” doesn't mean only paper money. In the No Tax on Tips rules, cash tips include tips left on a card and your share of a tip pool or tip-sharing arrangement. It's the IRS's way of saying money, as opposed to a gift like a free meal or event tickets.

“Reported to the employer” is the part that matters most. Box 12 can only show what your employer knows about: the tips you reported each month, plus the card tips that came through their system. So:

• In it: cash tips you reported, card tips, your share of a tip pool.
• Not in it: automatic gratuities and service charges (those are wages, in box 1, and never count as tips for the deduction), tips you never reported, and allocated tips from box 8.

And one thing that doesn't change: tips in box 12 are still taxed for Social Security and Medicare, and your employer still withholds income tax on them through the year. The deduction comes later, when you file.

Box 14b: your job's code

The deduction only covers tips from jobs on the Treasury's list of occupations that “customarily and regularly” received tips. Box 14b tells the IRS which one you were in. These are the codes you'll see in a restaurant:

A few rules about the box itself:

• It can hold two codes. If you served some shifts and bartended others at the same restaurant, you might see 102, 101. If you got tips in three or more listed jobs there, your employer lists any two.
• 000 means “not on the list.” When any of your tips came from a job that doesn't qualify, your employer has to put 000 as one of the codes. Then only part of box 12 counts toward the deduction, and you'll need your employer to tell you which part.
• It's per employer. Two jobs means two W-2s, each with its own box 12 and box 14b.

Box 7 or box 12: which number counts?

For almost every server, box 7 (Social security tips) and box 12 code TP will be the same number: both are the tips you reported. Box 7 can be lower only in unusual cases, like pay plus tips above the Social Security wage base ($184,500 for 2026).

If you filed for 2025, you may remember using box 7. That's because 2025 W-2s didn't have code TP yet, so the IRS told people to use box 7 instead. For 2026, the IRS's draft Schedule 1-A asks for box 12, code TP directly. Don't use box 1: it's your tips and your hourly pay together.

How box 12 gets to your tax return

You claim the deduction on Schedule 1-A, Part II. The IRS's draft of the 2026 version gives each employer its own line (4a through 4e): the employer's name, its EIN from box b of the W-2, and the qualified tips included in box 12 code TP. Those lines are added up, capped at $25,000, and reduced by $100 for every $1,000 your income passes $150,000 ($300,000 on a joint return).

The $25,000 cap is for the whole return, not per job: $14,200 at brunch plus $9,350 at the bar is $23,550, all of it deductible, but $18,000 at each would still top out at $25,000. Your tax software will ask for box 12 and box 14b from each W-2. Type them exactly as printed.

When box 12 doesn't match your own numbers

Before you file, hold each W-2's box 12 up against your own record of what you made at that job. They won't match to the penny if you rounded your reports, but they should be close. If they aren't, the usual reasons are:

• You reported less than you made. Every cash tip you didn't report is missing from box 12.
• Tip-outs. You report what you keep, after tipping out the bar and the bussers. If you've been reporting your tips before tip-out, box 12 will look bigger than your take-home, and you've been paying tax on money that went to someone else.
• Service charges. A large-party gratuity your restaurant added to the bill is a service charge. It belongs in your wages, not in box 12.
• A payroll mistake. It happens, especially in the first year of a new box.

If the W-2 is wrong, ask your employer for a corrected one, a Form W-2c. If you still don't have it by the end of February, the IRS can contact your employer for you (800-829-1040), and if it's still missing when you file, you can use Form 4852 in its place.

If the W-2 is right and you're the one who under-reported, there's still a fix: Form 4137. You list each employer and all the tips you got there, reported or not, and pay Social Security and Medicare tax on the part you didn't report. On the draft Schedule 1-A, each employer's line then takes the larger of box 12 or your Form 4137 figure. Those tips were always taxable income; reporting them is what lets them count.

The comparison only works if you have your own numbers. A notebook does it. So does Tip’d, the tip tracker we make for iPhone: log a shift's hours, cash tips, card tips and tip-out in a few taps, and its Year screen shows the tips you kept this year beside the $25,000 limit. The Excel export lists every shift with its job, so you can add up each job's tips and set them right next to that W-2's box 12. Logging shifts is free, and your shifts stay in your own iCloud.

Questions people ask

What is code TP on a W-2?

The total tips you reported to your employer during the year, including card tips and your share of a tip pool, shown in box 12. It's new on 2026 W-2s and is the number used for the No Tax on Tips deduction.

What is box 14b on a W-2?

The Treasury Tipped Occupation Code for the job you earned your tips in: 102 for wait staff, 101 for bartenders, 109 for hosts, 104 for bussers and barbacks. It can hold up to two codes.

What does 000 in box 14b mean?

Some of the tips in box 12 came from a job that isn't on the IRS's list, so not all of them qualify for the deduction. Ask your employer how much came from the job that qualifies.

Is box 12 code TP the same as box 7?

Usually, yes. Both are the tips you reported. Box 7 can only be lower if your pay and tips together go over the Social Security wage base, $184,500 for 2026.

Are the tips in box 12 tax-free?

Not entirely. You still pay Social Security and Medicare tax on them, and your state may tax them. The deduction only lowers federal income tax, on up to $25,000 of tips.

My W-2 doesn't have code TP. What now?

If it's a 2025 W-2, that's normal: the code starts with 2026 W-2s. If it's a 2026 W-2 from a tipped job and you reported tips, ask your employer for a corrected W-2.

When will I get my 2026 W-2?

Employers have to give it to you by February 1, 2027.

What is code TT?

Qualified overtime pay: only the extra “half” of time-and-a-half that the Fair Labor Standards Act requires. It's for the separate No Tax on Overtime deduction, up to $12,500 ($25,000 on a joint return).

Sources

• IRS: General Instructions for Forms W-2 and W-3 (2026) (box 12 code TP, box 14b, box 7, box 8, due dates)
• IRS: About Form W-2
• IRS: Occupations that customarily and regularly received tips (the Treasury Tipped Occupation Codes)
• IRS: Draft tax forms (2026 Schedule 1-A and Form 4137, drafts, not for filing)
• IRS: Schedule 1-A, Additional Deductions
• IRS: Guidance for individuals who received tips or overtime during tax year 2025
• IRS Topic 154: Form W-2 (what to do if incorrect or not received)
• IRS: About Form 4137
• IRS Publication 531: Reporting Tip Income