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What Goes in W‑2 Box 12 Code TP

The reporting box is simpler than the deduction it feeds. Here’s exactly what dollar figure belongs there — on the W‑2 and on the matching 1099 boxes.

TY2026 reporting  ·  W‑2, 1099‑NEC & 1099‑MISC

A note on W‑2s. CertiFlow doesn’t file W‑2s yet, and we won’t until that service meets our standards. You shouldn’t have to wait for good information, though. We want you to have the most accurate, trustworthy answer we can give, whether or not you ever use CertiFlow.

Looking for the overtime box instead? Calculate what goes in W‑2 box 12 code TT →

New for tax year 2026: Form W‑2 box 12 has a code TP. 1099‑NEC and 1099‑MISC each gained a cash‑tips box too. All three exist because of the OBBBA “No Tax on Tips” deduction — but the number in the box has almost nothing to do with the deduction math.

The short answer

Box 12 code TP is the total cash tips your employee reported to you during the year. It’s the same figure payroll has always tracked, just moved into its own box. Nothing filters it by occupation. Nothing caps it at $25,000 or adjusts it for income. That math happens later, on the employee’s own tax return.

What counts as a “cash tip” here

The final Treasury regulations draw the same line tip law always has, with one addition:

Counts toward the total

  • Cash handed to the employee directly and claimed by the employee
  • Tips charged to a credit, debit, or gift card, whether paid out immediately or added to their paycheck
  • Tips received through a tip‑pooling or tip‑sharing arrangement

Leave out

TP and Box 14b answer different questions

Box 12 TP is a dollar amount. Box 14b holds the employee’s Treasury Tipped Occupation Code (TTOC) — up to two, for a worker with more than one tipped job — and that’s what decides whether the tips are “qualified.” An employee can report a real number in Box 12 TP and still get 000 in Box 14b, if their occupation isn’t on the TTOC list. Either way, the tips were reported correctly. They just aren’t eligible for the deduction.

Don’t have the occupation code yet? Look up a Treasury Tipped Occupation Code →

Why the $25,000 cap never touches your number

The cap and the phase‑out belong to the employee’s tax return, not your payroll file. Their W‑2 box 12 TP figure — plus any 1099 amount, plus anything self‑reported on Form 4137 — feeds straight into their new Schedule 1‑A:

  1. Add every qualified-tip figure across their W‑2s, 1099s, and Form 4137.
  2. Cap the total at $25,000 per return — married filers share one $25,000 limit, it isn’t doubled.
  3. If modified AGI is over $150,000 single / $300,000 married filing jointly, the deduction shrinks by $100 for every $1,000 over the threshold — fully gone at $400,000 / $550,000.

Box 12 TP just needs the accurate, un‑reduced total. Nothing else.

Worked example

A bartender reports $31,000 in cash tips for the year. Box 12 TP reads $31,000 — the full amount, same as always.

On their return, the $25,000 cap limits the deduction — not anything payroll did. If their income is under the phase‑out threshold, they deduct the full $25,000, no matter how much more they actually earned in tips.

The 1099 side works the same way

The same logic applies if your business pays a 1099 worker who also collects tips through you — a salon running tips through its own point-of-sale system for a booth‑renting stylist, say:

Worth knowing, even though CertiFlow doesn’t file it: a worker whose tips flow through a payment app or gig platform may get a 1099‑K with its own qualified-tip box instead. That’s why a contractor’s tip numbers can end up split across two different forms.