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2026 Form W-2 · Gusto

Gusto: 2026 W-2 code TT and TP

Starting with 2026 Forms W-2, employers report qualified overtime in Box 12 code TT and cash tips in Box 12 code TP, with the tipped occupation code in Box 14b. Here is how to get those amounts right if you run payroll in Gusto.

1. Check what Gusto calculated

Read your provider's 2026 year-end notes and preview a W-2 for an employee who worked overtime. Look for three things:

• Is there a code TT amount at all?
• Is it the premium only (about one third of time-and-a-half pay), or the whole overtime wage? The whole wage is wrong.
• Does it include overtime that only exists because of a state daily rule or company policy? That part does not qualify.

2. Export the payroll data

Export a payroll journal or hours report for 2026 as CSV, with hours, rates, overtime, bonuses and tips by employee.

3. Calculate or check the amounts

Upload the export to the W-2 helper for every employee's code TT and TP, a list of items to review, and a CSV with the amounts. For one employee, use the free calculator.

4. Enter them and fix next year

• Enter each employee's amounts in the Box 12 fields during W-2 review (code TT and code TP) and the occupation code in Box 14b, or adjust what Gusto produced.
• For 2027, set up the overtime premium as its own pay item mapped to code TT so it fills in on its own.
• Keep the workpaper with your W-2 records. A wrong amount found after filing is corrected with Form W-2c.

What counts

• Code TT is the qualified overtime premium: one half of the employee's FLSA regular rate for every hour over 40 in a workweek. At $20 an hour, an overtime hour paid at $30 puts $10 in code TT.
• The regular rate includes nondiscretionary bonuses, commissions and shift differentials, not just the hourly rate.
• Overtime paid only because of a state daily rule (California, Alaska, Nevada, Colorado), a union contract, company policy, or a holiday or weekend premium does not count. Neither does pay to FLSA-exempt employees.
• Code TP is the cash tips (cash and card) the employee reported to you. Mandatory service charges are wages, not tips. Box 14b carries the Treasury Tipped Occupation Code.
• Report the full qualified amount. The employee's deduction limit ($12,500, or $25,000 joint) is applied on their own return.
• The 2025 penalty relief does not carry into 2026. A missing or wrong code TT is an incorrect W-2 and is fixed with a W-2c.

A calculation aid based on the IRS rules for tax year 2026, not tax or legal advice. The employer is responsible for the amounts on its Forms W-2. Product names belong to their owners; SWC Studios is not affiliated with them.