TTOC Payroll Warning - Missing TTOC for employee

TTOC Payroll Warning - Missing TTOC for employee

⚠️ Warning

"Missing TTOC for employee. Employee John Doe has an earning with W2 Box 12 Code TP but no TTOC is assigned. Please assign a TTOC to ensure accurate W2 reporting."

📘 What It Means

Employees who receive tips must be assigned the correct Treasury Tipped Occupation Code (TTOC) per IRS guidelines. This alert does not affect payroll processing at the time it appears — however, it will impact W-2 reporting at year end if left unresolved.


🔍 Why This Happens

Congress passed the One Big Beautiful Bill Act (OBBBA). Starting in 2026, tip income can be tax-free for qualifying workers — but only if their job appears on the IRS-approved occupation list. The IRS has approved 71 qualifying occupations. A TTOC must be assigned to any tipped employee whose role is on that list so the system can track tip income throughout the year and ensure employees receive the appropriate tax credit when they file their 2026 personal tax return.

Important: This alert will remain active until the TTOC is updated in each applicable employee’s profile. Updates should be made as soon as possible — every quarter that passes without the correct code assigned may have a direct impact on accurate W-2 reporting at year end.


🔎 How to Identify the Correct TTOC

Use the link below to identify the appropriate TTOC for your employee. The link below is the approved TTOC Jobs directly from the IRS Website. If you do not see a job that matches your employee's job or you have questions on which TTOC to assign to your employees, please reach out to your CPA or a Tax Professional for guidance. 


✅ How to Resolve

Once you’ve identified the correct TTOC for each applicable employee, you can update the record in 2 ways, one way would be within the payroll processing screen as you're seeing the alert, or the other would be reviewing all employees from the team view. Below would indicate both options with step-by-step instructions. All warnings should be resolved as the alert is present and before any quarter end throughout the year. Please note, if you see that the field is greyed out, you will need to update the employee's assigned Job settings, which is also indicated below. If you run into any access issues, feel free to reach out to your assigned specialist. 


InfoStep by Step Updating an Employee's TTOC Code  

There are two ways to navigate to the TTOC field for an employee.

Option 1: Through Employee Information  

  1. Select the Hamburger Menu.
  2. Navigate to Team > Employee Information.

  3. Select the employee.

  4. Go to the Main tab.

  5. Select Pay Information.


 

Option 2: Through Payroll Warnings  

  1. From the payroll warning screen, select the Payroll Warnings hyperlink.
  2. Select the People icon next to the employee.

  3. Go to the Main tab.

  4. Select Pay Information.

  5. Locate the TTOC field and choose the appropriate code.

 

 

 

 

 


If the TTOC Field Is Grayed Out  

If the TTOC field cannot be edited, the employee's assigned job must be updated.
  1. In the Pay Information section, select the Default Job hyperlink.

  2. Select the job assigned to the employee.

You will have two options:

Option A: Assign a TTOC Code at the Job Level  
  • Enter the TTOC code on the job record.

  • All employees assigned to that job will automatically receive the same TTOC code.

Option B: Allow Employee-Level Overrides  
  • Check the Employee Override option.

  • This allows a unique TTOC code to be entered for each individual employee.

  • After enabling Employee Override, return to Option 1 or Option 2 above to update the employee's TTOC code.