What did IRS TD 10044 finalize?

TD 10044 (April 2026) finalized Public Law 119-21 qualified tips rules under IRC §224: the definition of qualified tips, the Treasury Tipped Occupation Code (TTOC) list for W-2 Box 14b, and specified service trade or business (SSTB) limitations. Employers reporting Code TP must populate Box 14b with up to two TTOC codes per employee.

Does TD 10044 address W-2 Box 12 Code TT or qualified overtime?

No. TD 10044 covers tips (Code TP, Box 14b, TTOC) under IRC §224. It does not address IRC §225 qualified overtime, W-2 Box 12 Code TT, FLSA regular-rate calculations, Section 207(k) work periods, collective bargaining premiums, or fluctuating workweek methods.

Has the IRS issued final regulations for the qualified overtime deduction under IRC §225?

There are still no proposed or final IRS regulations for IRC §225 qualified overtime. The main IRS guidance is now Fact Sheet FS-2026-13 (August 6, 2026), which replaced FS-2026-01. Like other IRS FAQs, it is not binding on the IRS in resolving a case.

Can employers use the one-third overtime approximation on 2026 W-2s?

No. Notice 2025-69 allowed individual taxpayers to estimate one-third of total overtime on 2025 personal returns when employers were not required to report separately. For tax year 2026 W-2s, employers must report the actual FLSA overtime premium in Box 12, Code TT, not a one-third approximation.

Why did the IRS finalize tips rules before overtime rules?

The TTOC occupation list required formal notice-and-comment rulemaking under TD 10044. Code TT relies on existing FLSA regular-rate infrastructure in DOL 29 CFR Part 778, but the IRS has not yet issued explicit cross-reference or interpretive guidance for how that maps to Code TT computation.

What should employers do while there are still no §225 regulations?

Document the methodology used to isolate the qualified premium with reference to regulatory authority, compute the actual premium (not one-third approximations) for 2026 W-2s, follow IRS Fact Sheet FS-2026-13, and build reporting that can be audited and adjusted when final §225 regulations arrive.

What April's TD 10044 Did and Didn't Do

IRS TD 10044 finalized Public Law 119-21 qualified tips (Code TP, TTOC, Box 14b) under IRC §224. It did not address qualified overtime. That came later, in IRS Fact Sheet FS-2026-13.

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