Tax year 2026

W-2 Box 12 Code TT: What It Means for Your 2026 Taxes

Code TT in box 12 of your 2026 Form W-2 is the total qualified overtime compensation your employer paid you — the premium above your regular rate that the FLSA requires. It’s the number you use for the no tax on overtime deduction, and for 2026 you can’t deduct more than it shows.

What code TT is

Code TT is one of the new box 12 codes on the 2026 Form W-2. It reports only the qualified part of your overtime — for time-and-a-half, the “half”. Your overtime pay still counts as wages, and Social Security and Medicare tax still apply to it. The tips codes are separate: code TP for cash tips and box 14b for your tipped occupation code.

Why it matters

For tax years after 2025 the IRS says you may not consider any qualified overtime above what is reported in box 12 code TT. The 2025 relief that let workers figure the amount themselves (Notice 2025-69) doesn’t apply any more. From 2026, code TT is the only figure that counts.

TT missing or wrong: ask for a W-2c

If code TT is missing or lower than the qualified overtime you were paid, ask your employer for a corrected W-2 (Form W-2c). If the employer won’t or can’t correct it, you can only use the amount that was reported. A substitute W-2 (Form 4852) can’t be used for this deduction.

Overstated TT

If code TT is higher than what you were actually paid, you may only use the actual amount. The IRS example: an employer paid $5,000 of qualified overtime but reported $10,000 — the employee can include no more than $5,000.

Calculate your deduction

Enter the code TT amount from your W-2. For an estimate from your hours, use the full no tax on overtime calculator.

Qualified amount: $0
After the cap: $0
Phase-out reduction: $0
Your deduction: $0
Federal income tax saved (est.): —

Doesn’t reduce FICA (7.65%). Whether your state follows this deduction depends on your state. Claimed on Schedule 1-A, Part III.

This calculator gives an estimate for federal income tax only, based on IRS guidance as of 2026-11-10. It is not tax advice. Social Security, Medicare and state taxes are not reduced. Confirm your figures with your W-2/1099 and the Schedule 1-A instructions, or a tax professional.

Code TT FAQ

What does code TT mean on a W-2?

Box 12 code TT is the total amount of qualified overtime compensation your employer paid you during the year — only the premium above your regular rate that the FLSA requires, such as the “half” of time-and-a-half. It is new on the 2026 Form W-2.

Is the code TT amount already excluded from box 1 wages?

No. Overtime is still wages and stays in box 1, and Social Security and Medicare tax still apply. You use the TT amount to figure the separate deduction on Schedule 1-A, Part III.

Can I deduct more overtime than code TT shows?

Not for tax years after 2025. The IRS says you may not consider any qualified overtime in excess of what is reported in box 12 code TT. If the amount is too low, ask your employer for a Form W-2c.

Can I use Form 4852 if my employer won’t correct code TT?

No. The IRS says Form 4852 does not satisfy the reporting requirement, so overtime reported only on Form 4852 can’t be used for the deduction.

What if code TT is too high?

You may only use the qualified overtime you were actually paid. If TT is overstated, deduct the actual amount, not the reported one.

Why doesn’t my 2025 W-2 have code TT?

For 2025, employers were not required to report qualified overtime separately; Notice 2025-69 lets you figure the amount yourself for that year. Code TT starts with the 2026 Form W-2.

Sources and last updated

Last updated: 2026-11-10 · Tax year: 2026 · Maintained by the WattFlow team. No CPA or EA has reviewed this page.

Changelog

2026-11-10 — First published.