What does IRS Fact Sheet 2026-13 say about Code TT?

Fact Sheet 2026-13 supersedes earlier January guidance and states the operational math for reporting qualified overtime in W-2 Box 12, Code TT (Question 12): hours worked in excess of forty in a workweek, multiplied by one-half, multiplied by the employee’s FLSA regular rate of pay.

Why is the FLSA regular rate the hard part of Code TT?

Question 15 of Fact Sheet 2026-13 defines the regular rate as all remuneration for employment in the workweek (except statutory exclusions), divided by FLSA hours actually worked. Shift differentials, non-discretionary bonuses, retention premiums, callout minimums, on-call pay, compensable per-diem allocations, piece-rate, and commissions all roll into that rate before the half-time premium is computed.

Do major payroll systems automatically compute Code TT?

As of September 2026, major payroll platforms still publicly document blended overtime computation and customer configuration guidance — not an automated engine that isolates the FLSA-required half-time premium from the rest of overtime pay. The platform will write whatever Code TT figure the customer designates; it typically will not compute that figure.

How do collective bargaining premiums affect Code TT under Fact Sheet 2026-13?

Question 16 states that non-FLSA-required overtime premiums (Sunday doubletime, holiday premium above straight time, storm-event multipliers, mutual-aid host-utility rates, consecutive-day contract premiums, and similar CBA items) qualify only to the extent minimally necessary under FLSA Section 207. Only the underlying FLSA half-time portion belongs in Code TT; the generous CBA portion must be carved out.

When are the first Code TT W-2s due under this regime?

Tax year 2026 closes December 31, 2026. The first W-2 filings reflecting this reporting regime are due to the Social Security Administration by January 31, 2027 — roughly ninety days from mid-September 2026 for employers still building a defensible methodology.

What are the IRS penalties for incorrect Code TT reporting?

IRC §6721 (failure to file correct information returns) sets a $680 per-form intentional-disregard penalty with no aggregate cap — $272,000 for a 400-employee employer on the filing side alone. IRC §6722 (failure to furnish correct payee statements) stacks separately with the same no-cap intentional-disregard exposure.

You just begin. You do the math. You solve one problem, and then you solve the next one. And if you solve enough problems, you get to come home.

IRS Fact Sheet 2026-13 spells out Code TT math. The hard part is the FLSA regular rate and CBA carve-outs — and employers have about ninety days before January W-2s.

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