Box 12 · tax year 2026
What is Box 12 Code TP on your W-2?
Code TP is the total of your qualified tips for the year — the figure the tip deduction is calculated from.
What the figure represents
Box 12 code TP reports the cash tips you reported to your employer that count as qualified tips under IRC §224. It is an informational figure: your employer has already included those tips in your taxable wages, and code TP simply separates out the portion that may qualify for the new deduction.
What to do with it
Carry the amount into Schedule 1-A (Form 1040), Part II, and work through lines 4 to 13. The deduction is capped at $25,000 and shrinks once your income passes $150,000 ($300,000 filing jointly), so the number in box 12 is a starting point, not your deduction.
Does it change your withholding?
No. This box is informational only. It does not alter federal income tax withholding, and it does not reduce Social Security or Medicare tax — those still come out of the same wages as before.
Why it appeared this year
Employers were not required to report these amounts separately for tax year 2025, so this is the first W-2 on which the figure appears. That is a reporting change, not a change to what you earned.