Code TT CheckRequest service
For small employers, bookkeepers and payroll admins with hourly staff

Put the right overtime figure in box 12 code TT before February 1

For 2026, employers must report each employee's qualified overtime on Form W-2 in box 12 with code TT, and an employee can only deduct what you report there. The figure is not your overtime line: it is only the FLSA-required half-time premium, worked out per workweek on the FLSA regular rate. Send us your 2026 payroll register and time records; we compute each employee's code TT, and code TP for tips, and show our working.

Updated

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  • Workweek-by-workweek calculation using the IRS formula: FLSA hours over 40, times one-half, times the FLSA regular rate including bonuses, shift pay and commissions.
  • State daily overtime, double time, holiday premiums and paid-not-worked hours separated out, so only the FLSA-required part reaches code TT.
  • A per-employee table you or your payroll provider can key in, plus the workpaper and method note that back up every number.
First employee checked for $19Figures back within 5 business daysFrom $99 for up to 10 employees
You get the figures and the workingA per-employee code TT and code TP table, the workweek…
Feb 1, 2027

2026 Forms W-2 are due to employees and to the SSA by February 1, 2027; box 12 code TT reports qualified overtime and code TP reports cash tips.

Source: irs.gov
Half

Only the "half" portion of time-and-a-half is reported with code TT. The IRS formula is FLSA hours over 40 in the workweek, times one-half, times the FLSA regular rate.

Source: irs.gov
No relief

The IRS says no relief is available after 2025: employees may not consider any qualified overtime beyond what is reported in box 12 code TT.

Source: irs.gov
Why now

The W-2 needs a number most payroll registers do not hold

The 2025 law that created the deduction for qualified overtime also requires employers to report it. For 2025 the IRS gave transition relief; for 2026 it is mandatory, on Form W-2 box 12 code TT, with W-2s due to employees and the SSA by February 1, 2027. The IRS FAQs say an employee may only consider overtime that the employer reported in code TT, so a missing or low figure costs your staff their deduction, and an error has to be fixed with a W-2c.

Qualified overtime is not what your register calls overtime. It is only the premium the Fair Labor Standards Act requires: the half in time-and-a-half, for FLSA hours worked over 40 in a fixed workweek, on the FLSA regular rate, which includes nondiscretionary bonuses, shift differentials and commissions. California-style daily overtime, double time, weekend premiums and overtime calculated on holiday or sick hours count only to the extent the FLSA required them.

So the number has to be rebuilt from time records week by week. Payroll software will fill in box 12 from whatever earning codes it has, and an October 2026 CPA Practice Advisor article set out why code TT will not tie to the payroll register for many employers. Code TT Check does the rebuild and gives you a figure you can defend.

Without it

  • Your payroll software: Most payroll systems will print box 12 code TT from the earning codes you set up. That works when overtime is simple…
  • Doing it yourself: Free, and the IRS has published the formula and examples in its qualified overtime FAQs. The time goes into rebuilding…
  • Your CPA or payroll accountant: The right person to own the filing and to decide close calls on exemptions. Hand them our workpaper so their time goes…

With Code TT Check

  • Workweek-by-workweek calculation using the IRS formula: FLSA hours over 40, times one-half, times the FLSA regular rate including bonuses, shift pay and commissions.
  • State daily overtime, double time, holiday premiums and paid-not-worked hours separated out, so only the FLSA-required part reaches code TT.
  • A per-employee table you or your payroll provider can key in, plus the workpaper and method note that back up every number.
  • Workweek rebuild
  • Regular rate done properly
How it works

How it works

  1. 1

    $19 check on one employee

    Send one overtime-eligible employee's 2026 pay stubs or register lines and time records. We compute their code TT to date and tell you whether your payroll figure matches.

  2. 2

    Send the year's records

    Payroll register by pay date with earning codes, time records by day, bonus and commission payments, and your workweek start. Exports from any payroll or timekeeping system work.

  3. 3

    We rebuild each workweek

    Hours worked per workweek, the FLSA regular rate with every included pay type, the required premium, and the split between FLSA and state or contract overtime.

  4. 4

    You get the figures and the working

    A per-employee code TT and code TP table, the workweek workpaper, a list of exceptions found, and a method note, ready for your W-2 run.

What it does

Features

Workweek rebuild

Semi-monthly or biweekly pay periods split back into the fixed 168-hour workweeks the FLSA uses, with no averaging across weeks.

Regular rate done properly

Nondiscretionary bonuses, shift differentials, commissions and piece rates folded into the regular rate; later bonuses allocated back to the weeks they cover.

State and contract overtime split

Daily overtime, double time, weekend and holiday premiums separated into the FLSA-required part, which goes to code TT, and the rest, which does not.

Exempt and owner check

Employees flagged where the FLSA likely makes them overtime-ineligible, such as salaried exempt staff or managing owners with 20% or more, for you to confirm.

Tips: code TP and box 14b

Cash tips reported to you, totalled per employee for code TP, with the Treasury Tipped Occupation Code to check for box 14b.

Payroll comparison

Our figure next to what your payroll system will print, with the reason for every difference, so you can fix the earning codes or override the box.

W-2c list

If W-2s have already gone out, the employees whose code TT needs a corrected Form W-2c and the corrected amounts.

Method note

A short note of the method, allocation and rounding choices used, applied the same way for every employee, to keep with your payroll records.

A look inside

A look inside

What you get: the working view and the delivery report.

Illustration of the layout, built from this page's own feature list. It shows no real results.

The working viewPayroll register by pay date with earning codes, time records by day, bonus and commission payments, and your workweek start. Exports from…
Your delivery reportThe one-employee check comes back within 2 business days; the full set within 5 business days of receiving complete records. Order by…
Built for

Who it's for

Small employers with hourly staff

Restaurants, trades, clinics, warehouses and retailers running payroll in QuickBooks, Gusto or similar, with overtime most weeks.

Employers in daily-overtime states

Where state law pays overtime by the day or at double time, the payroll overtime line and code TT will rarely match.

Bookkeepers and accountants

Clients asking what goes in code TT in January. Send us the exports and keep the W-2 filing in-house.

Works with

Plans

Pricing

The first employee check is $19, credited in full against a larger plan ordered within 30 days. Larger plans are one-time prices for the 2026 tax year, paid once after we confirm your headcount. We calculate the figures and you, your payroll provider or your accountant file the W-2s. We are not a CPA firm and do not give tax or legal advice on whether an employee is exempt. Founding customer pricing applies to early-access orders.

Orders are subject to the Code TT Check terms.

One employee

$19 one-time

See if your payroll figure is right

  • One overtime-eligible employee
  • Code TT to date from their records
  • Comparison with your payroll figure
  • Reply within 2 business days
  • Fee credited in full against a paid plan ordered within 30 days
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Recommended

Small team

$99 one-time

Up to 10 employees for 2026

  • Up to 10 employees
  • Workweek-by-workweek code TT
  • Code TP tip totals
  • Payroll comparison with reasons
  • Workpaper and method note
  • Email questions until April 15, 2027
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Team

$249 one-time

Up to 50 employees, or several locations

  • Up to 50 employees
  • Everything in Small team
  • Several workweek definitions or locations
  • W-2c list if W-2s already went out
  • 30-minute review call
  • Extra employees at $4 each
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Compared with the alternatives

Your payroll software
Most payroll systems will print box 12 code TT from the earning codes you set up. That works when overtime is simple weekly time-and-a-half on one rate; daily overtime, double time, bonuses and several rates need the codes split or the figure overridden.
Doing it yourself
Free, and the IRS has published the formula and examples in its qualified overtime FAQs. The time goes into rebuilding workweeks and regular rates for every employee, which is what we do.
Your CPA or payroll accountant
The right person to own the filing and to decide close calls on exemptions. Hand them our workpaper so their time goes on review, not arithmetic.

What changed

  • 2026 Forms W-2 are due to employees and to the SSA by February 1, 2027; box 12 code TT reports qualified overtime and code TP reports cash tips. Source: irs.gov
  • Only the "half" portion of time-and-a-half is reported with code TT. The IRS formula is FLSA hours over 40 in the workweek, times one-half, times the FLSA regular rate. Source: irs.gov
  • The IRS says no relief is available after 2025: employees may not consider any qualified overtime beyond what is reported in box 12 code TT. Source: irs.gov
  • Penalties for W-2s due after December 31, 2026 run from $60 to $340 per incorrect or late form, depending on how late the correction is. Source: irs.gov
Getting started

From payroll export to W-2 figures

The one-employee check comes back within 2 business days; the full set within 5 business days of receiving complete records. Order by mid-January to leave time before February 1.

  1. Day 1: Request the $19 check and send one employee's records.
  2. Day 3: We reply with their code TT and whether your payroll figure matches.
  3. Day 4: You send the full 2026 register and time records.
  4. Day 5–9: We deliver the per-employee table, workpaper and method note.

Security and data

  • Payroll files are uploaded over an encrypted link, stored encrypted and deleted 60 days after delivery, or earlier on request.
  • We do not need Social Security numbers: send records with employee IDs or names only.
  • We never ask for logins to your payroll or bank accounts.
  • Results are shared only with you and the contacts you name, such as your accountant.
Guides

Guides and answers

W-2 box 12 code TT: how to calculate qualified overtime

Code TT is new on 2026 W-2s, due February 1, 2027. The IRS formula, what counts, what does not, worked examples, W-2c corrections and penalties.

Read the guide →

Daily overtime and double time on W-2 code TT

State daily overtime and double time count for code TT only where the FLSA required overtime. Rules from the IRS FAQs with worked weeks for 2026 W-2s.

Read the guide →

Questions

What is box 12 code TT on a W-2?

Code TT reports the total qualified overtime compensation you paid the employee in the year: only the overtime the FLSA requires above the regular rate, the half in time-and-a-half. It is new for 2026 W-2s.

Do I report more than $12,500 if that is what I paid?

Yes. The IRS says code TT is the total qualified overtime paid, even when it is above the employee's deduction limit of $12,500, or $25,000 on a joint return.

Does California daily overtime count?

Only the part the FLSA required. An employee who works four 10-hour days earns daily overtime under state law but has no FLSA hours over 40 that week, so that week adds nothing to code TT.

What if I already filed my W-2s?

If code TT was wrong, the IRS says you must file Form W-2c with the SSA and furnish it to the employee as soon as possible. We list which employees need one.

Do I have to change withholding?

No. The IRS says overtime stays subject to federal income tax withholding, and you may not reduce it for the deduction unless the employee gives you an updated Form W-4.

Which records do you need?

The 2026 payroll register with earning codes and pay dates, daily time records, bonus and commission details, and your workweek start day and time. We send a short checklist after the one-employee check.

Is this tax advice?

No. Code TT Check is an independent payroll calculation service. We apply the IRS and Department of Labor guidance to your records; decisions on exemptions and the filing stay with you or your accountant.

Give your staff the deduction the law gave them

Start with one employee for $19. Every hourly employee's code TT and code TP, worked out week by week, from $99.

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