What is W-2 box 12 code TP for tips?

🇺🇸 US rulesVerified September 23, 2026

The short answer

On 2026 Forms W-2, employers report total cash tips you reported to the employer in box 12 using code TP. That figure helps you figure qualified tips for the federal tip deduction on Schedule 1-A Part II. 2025 W-2s didn’t use this code; Notice 2025-69 covered transition methods. Code TP isn’t the deduction itself, doesn’t waive FICA, and doesn’t make every dollar automatically “qualified” (occupation, voluntariness, and other rules still apply).

Example math

W-2 box 12 code TP shows $14,000. You also have $1,000 of tips you will report on Form 4137.

  1. Employer-reported cash tips (TP): $14,000.
  2. Additional Form 4137 tips (if filed): $1,000.
  3. Rough qualified tips before cap and phase-out ≈ $15,000, if the other §224 rules are met.
  4. Illustrative savings: enter your own marginal rate in the calculator.

Not tax advice. Compare TP to your tip log, and ask payroll if it looks wrong.

Check your estimate

Start from TP plus any Form 4137 amounts; subtract non-qualified service charges you know were mislabeled.

Open the calculator

Plain English

Why TP exists

IRS tip guidance and the 2026 General Instructions for Forms W-2 and W-3 describe box 12 code TP for cash tips reported to the employer. Use it with box 14b (Treasury Tipped Occupation Code) when working through Schedule 1-A Part II.

What TP is not

  • Not a refund code.
  • Not proof that an auto-gratuity was reclassified as tips. See Does an auto-gratuity count as a tip?
  • Not a 2025 box (the transition year used other methods under Notice 2025-69).

Common mistakes

  • Ignoring TP and retyping a guessed tip total into software.
  • Assuming TP includes tip-outs you already passed on. It should generally reflect tips you reported as yours, but payroll systems differ, so reconcile it to your log.
  • Skipping the box 14b occupation codes.

Official sources

Last verified:

Sources checked: IRS tip recordkeeping page, 2026 General Instructions for Forms W-2 and W-3, Notice 2025-69, and Schedule 1-A. Confirmed: employers report cash tips reported to them in W-2 box 12 code TP starting with 2026 Forms W-2.

Related questions

All No Tax on Tips questions →

TipMax Answers explains public IRS guidance in plain English for tipped workers. It is not tax, legal, or accounting advice. Rules can change. Confirm figures on IRS.gov and with a qualified tax professional before you file. TipMax the app helps you track tips and true hourly pay; it does not file your taxes. TipMax helps you reconcile tip logs to year-end totals; it does not issue W-2s.