W-2 Box 12 Code TT
Code TT reports your total qualified overtime compensation for the year — the deductible "half" portion of your time-and-a-half pay. It's already included in your Box 1 wages; it is not extra income.
Reviewed by Saurabh Sharma and Ashay Saraswat · last verified August 31, 2026 against IRS guidance.
Box 12 code TT is a new W-2 field, mandatory starting with 2026 W-2s, created to report "qualified overtime compensation" under the One, Big, Beautiful Bill Act (OBBBA). It's a subtotal, not additional pay: the dollar figure next to code TT is already part of your total wages in Box 1. Code TT simply tells you (and your tax software) how much of that Box 1 total was the overtime premium — the extra "half" you earned for overtime hours above your regular rate.
That premium figure is what determines your no-tax-on-overtime deduction, an above-the-line federal deduction of up to $12,500 (single/head of household) or $25,000 (married filing jointly) for tax years 2025 through 2028, subject to a MAGI phase-out. See theno tax on overtime calculatorto turn your code TT amount into an actual deduction and tax-savings estimate.
Only overtime required by the federal Fair Labor Standards Act (FLSA) is meant to be counted here — overtime required only by state law, a union contract, or a voluntary employer policy shouldn't be included. SeeFLSA vs. state overtime and this deductionfor the states where this distinction matters most.
This is general information, not tax advice, based on published IRS guidance for tax years 2025–2028. Confirm with a tax professional or the IRS before filing. Nothing you type here leaves your browser.
Frequently asked questions
What is Box 12 code TT on a W-2?
Code TT reports your total qualified overtime compensation for the year — the deductible "half" portion of your time-and-a-half pay under the Fair Labor Standards Act. It became a mandatory W-2 field starting with 2026 W-2s. It is already included in your Box 1 wages; it is not extra income on top of Box 1.
Is the amount in Box 12 code TT taxed differently?
No. It's taxed the same as any other wages during the year — federal income tax, Social Security, and Medicare are all withheld normally. The figure exists so you can claim the no-tax-on-overtime deduction on Schedule 1-A when you file, which reduces your taxable income (and your final tax bill), not your paycheck withholding.
Why didn't my 2025 W-2 have a code TT?
Code TT only became mandatory starting with 2026 W-2s. Tax year 2025 was a transition year: some employers voluntarily reported qualified overtime using a free-text label in Box 14 instead (like OBBBTT or OBBB OT), and others didn't report it separately at all under IRS penalty relief for that year.