On a 2026 Form W-2, tips you reported to your employer are included in Box 1 and Box 5 and shown separately in Box 7. New for 2026, Box 12 code TP shows the total cash tips you reported, and Box 14b shows your Treasury Tipped Occupation Code. Allocated tips appear only in Box 8. None of these boxes is, by itself, your tip deduction. The deduction is figured on Schedule 1-A.
This guide covers the W-2 for tax year 2026, the return most tipped workers will file in early 2027. For the deduction's caps and income limits, see the No Tax on Tips guide. For reporting cash tips to your employer, see do I have to report cash tips?.
Every tip-related box at a glance
| Box | Label on the form | What the 2026 instructions say goes there |
|---|---|---|
| 1 | Wages, tips, other compensation | Taxable wages plus the tips you reported to your employer. Allocated tips are not included. |
| 3 | Social security wages | Wages subject to social security tax, not including social security tips or allocated tips |
| 5 | Medicare wages and tips | Wages and tips subject to Medicare tax, including the tips shown in Box 7 |
| 7 | Social security tips | Tips you reported, even if the employer could not collect the tax on them. Boxes 3 and 7 together should not exceed $184,500, the 2026 social security wage base. |
| 8 | Allocated tips | Tips allocated by a large food or beverage establishment. Not included in Box 1, 3, 5, or 7. |
| 12, code A | Uncollected social security or RRTA tax on tips | Employee tax on tips the employer could not withhold because you had too little pay |
| 12, code B | Uncollected Medicare tax on tips | The same for Medicare tax (not Additional Medicare Tax) |
| 12, code TP | Total amount of cash tips reported to the employer | New for 2026 |
| 14b | Treasury Tipped Occupation Code(s) | New for 2026. Up to two occupation codes for the work in which you received tips. |
Source: General Instructions for Forms W-2 and W-3 (2026) and the 2026 Form W-2. Box 14 used to be a single "Other" box. For 2026 it is split, and the old Box 14 items now go in Box 14a.
Box 12 code TP and Box 14b
In the 2026 instructions, "cash tips" means voluntary tips paid in cash or charged to a card, as well as tips received through tip sharing. So card tips that run through payroll count in code TP, not just paper cash. Mandatory service charges are not qualified tips, even when they appear on the tip line.
Box 14b holds the occupation code or codes. Examples from the IRS list include 101 for bartenders and 102 for wait staff. If you received tips in more than two occupations, the employer reports any two. If any of your tips came from an occupation that is not on the list, 000 must be one of the codes. Check yours against the IRS tipped-occupations list.
Code TP is a total of reported cash tips. It is not a certified deduction amount. The 2026 draft Schedule 1-A asks for the qualified tips included in code TP, and the instructions for that line have not been published yet.
What about the 2025 W-2?
For tax year 2025 the IRS did not update Form W-2. It treated 2025 as a transition period and gave employers penalty relief if they did not report tips separately (IR-2025-110). So a 2025 W-2 has no code TP.
For a 2025 return, the 2025 Form 1040 instructions let employees figure qualified tips from any of these:
- Box 7
- the total of the monthly tip reports they gave the employer
- an amount the employer chose to report in Box 14 or on a separate statement
- the qualified tips included on Form 4137
If you are still filing or amending a 2025 return, follow those 2025 instructions, not the 2026 boxes described here.
Allocated tips, Form 4137, and codes A and B
Box 8 (allocated tips). Allocated tips are not part of Box 1. Publication 531 says to report them as additional income unless you have adequate records showing you received less. Because no social security or Medicare tax was withheld on them, they go on Form 4137.
Form 4137 (unreported tips). Use Form 4137 if you received $20 or more in cash and charge tips in a month and didn't report them all to your employer, or if Box 8 shows allocated tips you must report as income. On the 2026 draft Form 4137, line 1 lists each employer:
- column (c): the total cash and charge tips you received, including unreported tips
- column (d): the amount you reported to that employer
- line 4: the unreported amount, which goes on Form 1040, line 1c, "Tip income not reported on line 1a"
- line 13: the social security and Medicare tax on those unreported tips, which goes on Schedule 2
Codes A and B. These amounts are tax your employer could not withhold. Publication 531 says to report them as additional tax on your return. On Schedule 2, Form 4137 tax and uncollected tax on tips are separate entries. Line numbers differ between the current 2026 drafts, so use the final 2026 form.
How the W-2 connects to the tip deduction
On the 2026 drafts the numbers flow like this:
- Form 1040, line 1a: total of Form W-2, Box 1. Your reported tips are already in this amount.
- Form 1040, line 1c: unreported tips from Form 4137, line 4.
- Schedule 1-A, Part II, line 4: one row per employer. Column (iii) is the qualified tips included in Box 12 code TP. Column (iv) is the qualified tips included in Form 4137, line 1, column (c). Column (v) is the larger of the two, not the sum.
- Schedule 1-A, line 9: the smaller of your total or $25,000. The $150,000 / $300,000 MAGI phase-out follows, and the result is your tip deduction.
- Form 1040: the Schedule 1-A total is entered after adjusted gross income (AGI) and before taxable income. It does not reduce AGI. The exact Form 1040 line differs between the 2025 form and the 2026 draft, so use the line the final form names for Schedule 1-A.
Sources: 2026 draft Form 1040, 2026 draft Schedule 1-A, and 2026 draft Form 4137. These are drafts, and line numbers can change before the final forms are released.
Column (v) takes the larger number because Form 4137 column (c) already includes the tips you reported. Adding it to code TP would count those tips twice.
A worked example (illustrative)
Suppose a server has one employer in 2026 and no pre-tax deductions. She earned $9,800 in hourly wages and reported $21,400 in cash and card tips to her employer. Her employer could withhold all payroll taxes. Her W-2 might show:
| Box | Amount |
|---|---|
| 1 | $31,200 ($9,800 wages + $21,400 reported tips) |
| 3 | $9,800 |
| 5 | $31,200 |
| 7 | $21,400 |
| 12, code TP | $21,400 |
| 14b | 102 (wait staff) |
If those are all her tips, the W-2 already includes them. She doesn't need Form 4137. On Schedule 1-A, line 4, she would enter the qualified tips included in code TP, here up to $21,400, provided she meets the other requirements.
Now suppose her daily log shows another $600 of cash tips that she never reported, in months when her tips were well over $20. On Form 4137, column (c) would be $22,000, column (d) would be $21,400, and line 4 would be $600, which goes on Form 1040, line 1c. On Schedule 1-A, line 4, column (v) takes the larger of $21,400 (code TP) and $22,000 (Form 4137): $22,000, not $43,400. This is under the $25,000 cap. Whether the full amount is deductible still depends on her MAGI and the other rules.
These figures are hypothetical. Real W-2s often differ because of pre-tax deductions, multiple jobs, or tips paid in a different period. To model the cap and phase-out, use the tip deduction calculator.
Check your W-2 against your own records
When your W-2 arrives, compare Box 7 and code TP with your daily tip log and your employer's payout statements. Common reasons for a difference include:
- tips you never reported to the employer
- tip-outs counted twice or left out
- card tips paid in a different pay period than the shift
- mandatory service charges that you logged as tips
Ask your employer about a reporting error before you file. The employer corrects a W-2 with Form W-2c.
A daily tip log makes this check much faster. Download the free spreadsheet or printable log, or record shifts in TipScan with free CSV export. Your log helps you check the numbers, but it does not replace your W-2, an employer tip report, or a filed return.
Reviewed against the 2026 General Instructions for Forms W-2 and W-3, the 2026 Form W-2, IRS Publication 531, the 2025 Form 1040 instructions, and 2026 draft Form 1040, Schedule 1-A, and Form 4137 on November 3, 2026. General information, not individual tax advice. Confirm the final forms and instructions for the year you are filing.