W-2 box 12 code TP
Code TP is where your employer reports tips that may qualify for the tips deduction. A short guide, and a calculator.
Enter your tips to see the deduction, each step, and the estimated tax saved.
Estimate only, not tax advice. Your return is decided by the IRS forms and instructions, and a tax professional can check your numbers.
Reading the W-2
Two boxes work together: box 12 code TP shows the amount, and box 14b shows the Treasury Tipped Occupation Code for your job. Without a valid occupation code, the tips are not qualified tips. The code TP total is not added into the box 12 totals on Form W-3.
Using it on your return
Part II of Schedule 1-A starts from your qualified tips, applies the $25,000 cap and the MAGI reduction, and gives the deduction. Married people must file jointly, and a valid Social Security number is required. Overtime is reported separately under code TT.
Sources
- IRS: 2026 General Instructions for Forms W-2 and W-3
- Schedule 1-A (Form 1040), 2025
- IRS: Tipped occupations list
- IRS: Tax deductions for working Americans and seniors
Last checked . Figures follow the IRS pages above; the law can change, so confirm on irs.gov before you file. This site gives estimates, not tax advice.
Questions
What is code TP on my W-2?
On the 2026 Form W-2, box 12 code TP reports cash tips your employer knows about, for the tips deduction. Your occupation code appears in box 14b.
What if box 14b has no occupation code?
The IRS instructions say tips without a valid Treasury Tipped Occupation Code are not qualified tips. Ask your employer to correct the W-2.
Is the whole TP amount deductible?
Not always. The deduction stops at $25,000 and is reduced for higher incomes: $100 for each full $1,000 of MAGI over $150,000 ($300,000 joint).
Does TP show up in my 2025 W-2?
The code is for 2026 forms. For 2025, rely on your tip records and the IRS guidance for that year.