Level 4

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Tips included in Income but not showing separate in W-2

Forum|Forum|5 months ago
January 23, 2026
3 replies
17 views

I have a question about the tips deduction:

This client is showing $78k in W-2 box 1 for Wages, Tips, other income. The Earnings statement shows that of that $26,115.25 were Tips.

Where do I enter the tips to calculate the deduction if the tips are not showing in W-2 box 7?

ProSeries Professional

Best answer by rodrigo

@rodrigo wrote:

I can do that, but I want to know if there is another option since for some reason the w-2 is showing nothing in box 7

Id have the client reach out to the employer asking if a corrected W2 will be issued, or if a letter that clarifies that the tips on the paystub ARE QUALIFIED tips for the deduction will arrive under separate cover. They have to be voluntary for them to be qualified, they cant be a gratuity that's added automatically.

You are right, they may not be QUALIFIED tips. This is the best way handle this. Thank you!

Just-Lisa-Now-

Intuit Community Champion

Hopefully the employer fixes this moving forward, but couldn't you just carve the tips out of Box 3 and put them in Box 7, then the program will pick it up correctly?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

R

rodrigoAuthor

Level 4

I can do that, but I want to know if there is another option since for some reason the w-2 is showing nothing in box 7

Just-Lisa-Now-

Intuit Community Champion

@rodrigo wrote:

I can do that, but I want to know if there is another option since for some reason the w-2 is showing nothing in box 7

Id have the client reach out to the employer asking if a corrected W2 will be issued, or if a letter that clarifies that the tips on the paystub ARE QUALIFIED tips for the deduction will arrive under separate cover. They have to be voluntary for them to be qualified, they cant be a gratuity that's added automatically.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

T

Terry53029

Intuit Community Champion

You have to scroll down on the W2 work sheet to part III and fill in amount you want to flow to schedule 1a

@Just-Lisa-Now- Don't think box 7 flows to schedule 1a, and I would not change the W2

Just-Lisa-Now-

Intuit Community Champion

Terry, with nothing in Box 7, the software doesnt seem to pick it up as tips in Part III.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

T

Terry53029

Intuit Community Champion

Lisa if you just fill in an amount on line 2 part III it will flow. remember not all W2's will have an amount in box 7 for all ocupations

T

TaxGuyBill

Level 15

Unfortunately, I've seen quite a few posts so far about employers not putting qualified tips in Box 7. I guess I didn't realize how many employers have been doing it incorrectly.

But as was mentioned, we need to determine if they are actually tips or if they are service charges.

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