Form W-2 Box 12 Code TT Explainer & Verification Guide

Starting in tax year 2026 (for forms received in January 2027), employers must record qualified overtime pay in Box 12 under code TT.

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Form W-2 Wage and Tax Statement (Tax Year 2026)

OMB No. 1545-0008

1 Wages, tips, other comp.

$84,500.00

Includes total OT & base

2 Federal income tax withheld

$9,850.00

12a See instructions NEW CODE

TT $8,750.00

Qualified Overtime Compensation

badge For Employees & Workers

Check Box 12 of your 2026 W-2 for the letters TT.
The dollar figure beside TT is your eligible overtime premium deduction amount.
When using tax software, enter the code TT value exactly as shown.
Your deduction will populate on Form 1040 Schedule 1.
If Box 12 Code TT is missing, request a corrected Form W-2c from your HR department.

domain For Employers & Payroll Offices

Code TT tracks the 0.5x premium portion of overtime hours worked.
Do NOT include regular base pay (the 1.0x rate) in Code TT.
Only non-exempt hourly employees covered under FLSA Section 7 qualify.
Ensure payroll systems (ADP, Paychex, Gusto, Workday) have enabled Code TT reporting for 2026.

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Interactive 2026 Paystub Audit Checklist

Verify whether your employer's payroll system is properly recording your overtime hours for the Code TT deduction:

1. FLSA Overtime Hours Tracked

My paystub explicitly breaks out hours worked over 40 in a workweek on a separate line item.

2. Paid at Minimum 1.5x Regular Rate

My overtime rate is at least 150% of my regular base rate (e.g., $30/hr regular = $45/hr overtime).

3. Payroll Notice Submitted

I have notified my HR/payroll manager to verify they have updated software for 2026 Code TT reporting.

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policy IRS General Instructions for Forms W-2 and W-3 (Cat. No. 10134K) IRS Statutory Citation

Code TT is assigned strictly to qualified overtime compensation under the One Big Beautiful Bill Act. Do not combine with Code Q (Nontaxable combat pay) or Code DD (Cost of employer-sponsored health coverage).

Box 12 Codes • Code TT (Qualified Overtime Compensation) Verify on IRS.gov open_in_new

Frequently Asked Questions

What does Code TT mean in Box 12 of Form W-2?

Code TT is the official IRS code established to report qualified overtime compensation earned during the tax year. It reflects the 0.5x premium portion paid for hours worked over 40 in a workweek.

When will I see Code TT on my W-2?

Employers are required to report Code TT beginning with the 2026 tax year (on W-2 forms distributed in January 2027).

What if my employer did not report Code TT in Box 12?

If your employer did not populate Box 12 with Code TT, you must request an amended Form W-2c or retain your final year-end paystubs showing overtime hours and premium rates to substantiate your deduction on Form 1040 Schedule 1.

Does Code TT change what is in Box 1 (Wages)?

No. Box 1 will still report your total gross taxable wages. The qualified overtime deduction is taken as an adjustment to income on Form 1040 Schedule 1 when filing your return.