Tie-out tool / Penalties
Penalties for a wrong Code TT amount
A wrong dollar amount in box 12 is an incorrect Form W-2. For 2026 forms the penalty is $60 to $340 per form depending on how fast it is corrected, and at least $690 if the error is intentional.
2026 Forms W-2 (due February 1, 2027)
| Corrected | Penalty per form | Yearly maximum | Maximum, small business |
|---|---|---|---|
| Within 30 days after the due date | $60 | $698,500 | $244,500 |
| After 30 days, by August 1 | $130 | $2,095,500 | $698,500 |
| After August 1, or never | $340 | $4,191,500 | $1,397,000 |
| Intentional disregard | At least $690 | No maximum | No maximum |
Source: IRS General Instructions for Forms W-2 and W-3 (2026), Penalties. A small business has average annual gross receipts of $5 million or less for the 3 most recent tax years. A separate penalty with the same amounts applies to the copy given to the employee.
Rules that soften it
- $100 safe harbor. It "generally applies if no single amount in error differs from the correct amount by more than $100". The employee can elect out and ask for a corrected form. (W-2 instructions)
- De minimis count. If forms were filed on time and corrected by August 1, the penalty does not apply to the greater of 10 returns or one-half of 1% of the returns filed.
- Reasonable cause. No penalty for a failure shown to be due to reasonable cause and not willful neglect.
Money amounts are never an "inconsequential error".
Correcting Code TT
"If an employer discovers an error on Form W-2, box 12, code TT, the employer must file Form W-2c ... with SSA and furnish Form W-2c to the employee as soon as possible." (IRS FS-2026-13, Q11)
Do the whole year from a file
Drop a timesheet CSV, paste the register overtime totals, and get a worksheet per employee with the reason for every difference.
Open the tie-out toolRuns in your browser. Payroll data is never uploaded.
Questions
When are 2026 Forms W-2 due?
February 1, 2027, both to the Social Security Administration and to employees, per the 2026 IRS instructions.
Is a $50 Code TT error penalized?
It may fall under the $100 safe harbor for de minimis dollar errors, unless the employee elects otherwise.
Sources
- IRS, General Instructions for Forms W-2 and W-3 (2026)
- IRS Fact Sheet FS-2026-13, qualified overtime questions and answers (August 2026)
- IRS, Information return penalties
Fetched 2026-11-10. Regulation text was checked against the federal annual edition; links open the current online version.
Updated 2026-11-10. Tickfoot is an information tool, not tax, legal or professional advice.