Do employers have standardized Codes for overtime in box 14 across states?
Executive summary
Employers historically have no single, federally mandated, standardized set of short codes for overtime reporting in Box 14 of Form W‑2; Box 14 is a catch‑all “Other” field where employers may label entries as they choose, and some states add their own Box 14 expectations [1] [2]. Recent federal tax law changes created specific codes for qualified overtime and tips and a draft 2026 W‑2 that moves those items into Box 12 (codes “TT” and “TP”) and adds a Box 14b occupation code for tipped workers, but those changes are phased in and leave a transition period in which employers may continue using Box 14 with no universal, cross‑state code [3] [4] [5].
1. Box 14 has long been an employer‑defined “other” field, not a standardized codebook
Form W‑2’s Box 14 is labeled “Other” and the IRS allows employers to provide any additional information there, meaning there is no fixed federal list of standardized Box 14 codes and employers commonly choose their own short labels [6] [1] [2]. Employer‑chosen labels — from “FEHBA” for federal benefits to state disability or local taxes — are routine, and payroll guidance repeatedly advises clear labeling or an attached statement because Box 14 entries are employer‑specific [7] [2].
2. New federal law is creating specific, standardized codes — but on a different schedule and largely in Box 12
The One Big Beautiful Bill Act created temporary deductions for “qualified overtime” and qualified tips and the IRS draft 2026 W‑2 introduces specific Box 12 codes — TP for qualified tips and TT for qualified overtime — and a new Box 14b for a Treasury‑occupation code for tipped workers, signaling a federal move toward standardization for these items [3] [4] [8]. The draft form and instructions show how the federal government intends to standardize reporting for these items going forward, but the drafts are subject to final rulemaking and the provisions are limited in duration [3] [9].
3. The 2025/2026 transition period creates practical ambiguity; employers may use Box 14 without a uniform label
For tax year 2025 the Treasury/IRS allowed transition relief and instructed employers to provide qualified overtime information by a “reasonable method” — which has included Box 14, a separate statement, or electronic access — and explicitly said there would be no penalties during the relief period, leaving employers discretion about labeling [9] [5]. Legal analysis and payroll advisories have concluded employers can reasonably meet Code §6051 obligations by reporting qualified overtime in Box 14 in 2025, but that does not create a federal, cross‑state standardized code in Box 14 itself [10] [9].
4. States and payroll systems add fragmentation, so “standard” labels vary locally and by vendor
Several states require particular details for state filings and some local jurisdictions use designated codes, which means an employer that wants to be compliant across jurisdictions may need state‑specific Box 14 entries or explanations [11] [2]. Payroll vendors and employers have already started preparing: some systems defaulted Box 14 descriptions (e.g., “TT”) for transition reporting and some public employers used labels like “FLSA OT Prem” in 2025, illustrating that practice — not a universal legal standard — is driving the codes employees will see [12] [13] [14].
5. Bottom line — no single, nationwide, standardized Box 14 overtime code across states today
At present there is no single standardized Box 14 code that employers across all states must use for overtime; Box 14 has been employer‑defined and state practices differ [1] [2]. Federal law is moving overtime and tip reporting toward standardized codes (TT/TP) on Form W‑2 (placed in Box 12 under draft rules) and a new Box 14b for occupation codes beginning with the 2026 form draft, but adoption is phased and employers must navigate a 2025 transition window and state‑level requirements in the interim [3] [4] [5]. Practically, payroll teams should track FLSA‑mandated overtime precisely, follow final IRS guidance when issued, and coordinate state reporting expectations rather than rely on a single Box 14 code that will apply everywhere [8] [10].