Updated October 16, 2026. Quick answer: Boxes 1b, 1c and 1d of Form 1099-NEC exist only on the December 2026 revision; the 2025 form stops at box 1. Box 1b shows cash tips, box 1c shows a Treasury Tipped Occupation Code, and box 1d shows qualified overtime compensation, and the form tells you to use them for Part II and Part III of Schedule 1-A (Form 1040). Boxes 1b and 1d are already included in box 1a.
Form 1040 for 2025, read line by line: Form 1040 line 1c, Form 1040 line 1d and Form 1040 lines 1e and 1f.
Related reading on this site: Form 1099-NEC filing deadline.
The employee copy of Form W-2, read box by box: W-2 box 14.
The employee copy of Form W-2, read box by box: W-2 box 7 and W-2 box 8.
What the three boxes report
The December 2026 recipient copy adds three lines under box 1a, labelled “Cash tips”, TTOC and “Overtime compensation”. The instructions give the reason: “P.L. 119-21, section 70201, requires the reporting of cash tips.” “These new boxes were added to facilitate this reporting requirement for Forms 1099-NEC and 1099-MISC.”
| Box on the December 2026 NEC | What it shows | What the form says to do with it |
|---|---|---|
| 1b Cash tips (MISC box 13a) | “Shows the total amount of cash tips.” | “Use the amount in box 1b when determining the qualified tip deduction in Part II of Schedule 1-A (Form 1040).” |
| 1c TTOC (MISC box 13b) | “Shows up to two Treasury Tipped Occupation Code(s) (TTOC) for your tipped occupation(s).” | “Use this code(s) in determining the deduction for qualified tips in Part II of Schedule 1-A (Form 1040).” |
| 1d Overtime compensation (MISC box 14) | “Shows the total amount of qualified overtime compensation.” | “Use the amount in box 1d when determining the qualified overtime compensation deduction in Part III of Schedule 1-A (Form 1040).” |
The same facts are printed on the 1099-MISC form under different numbers, and the miscellaneous form is covered on the Form 1099-MISC overview. The full box-by-box layout is on the 1099-NEC and 1099-MISC boxes overview.
Boxes 1b and 1d are inside box 1a
Neither box adds to what you earned. For tips, the form says ““Cash tips” include tips received in cash or charged.” and “This amount has been included in the amount reported in box 1a.” For overtime, it uses the same sentence: “Shows the total amount of qualified overtime compensation. This amount has been included in the amount reported in box 1a.”
So box 1a stays the total that goes to Schedule C or Schedule F for a sole proprietor, which is explained on the Schedule C page. Boxes 1b and 1d are labels on part of that total. Here is an illustration, not an IRS example: if box 1a shows $20,000 and box 1b shows $3,000 then $20,000 minus $3,000 leaves $17,000 of box 1a that is not cash tips. Box 1a is not $23,000.
Box 1c and the 000 code
Box 1c is the one box that holds a code, not a dollar amount. The form says what a 000 means: “If the occupation code 000 is used, and no other code is included in box 1c, your cash tips are not qualified tips; do not use the amount reported in box 1b for the deduction for qualified tips.”
The payer instructions explain how the code gets there. “Enter up to two code(s) based on the occupation(s) that the tips were received in.” “If tips were received in more than two occupations, include the Treasury Tipped Occupation Code for any two of the three or more occupations in which tips were received.” “If any tips were received in a nonqualifying occupation, then “000” must be input as one of the occupation code(s).” The code list itself is published by the IRS at “IRS.gov/TTOC”.
Box 1d and what counts as overtime
Box 1d is narrower than total overtime pay. The payer instructions define it: “Qualified overtime compensation is compensation that is paid to an individual required under section 7 of the Fair Labor Standards Act (FLSA) of 1938 that is more than the regular rate at which the individual is paid.” “only the “half” portion of “time-and-a-half” compensation would be reported in box 1d”.
Illustration, not an IRS example: suppose a regular rate of $30 an hour and 10 hours paid at time-and-a-half, which is $45 an hour. The pay for those hours is $45 x 10 = $450 and sits in box 1a. The half portion is half of the regular rate, $30 x 0.5 = $15 an hour, so $15 x 10 = $150 is the amount that would be reported in box 1d.
Where the deductions are claimed
Both deductions are on Schedule 1-A (Form 1040): box 1b and box 1c feed Part II, and box 1d feeds Part III. The recipient instructions say which box to use for each part, and the Schedule 1-A instructions are the place to check who qualifies. If no tax was withheld from the payments, the estimated tax note that goes with box 1a still applies, and the first-year estimated taxes page walks through the payments. The self-employment tax page explains the tax on this income.
Edition and box numbers
The primary read for this page is the December 2026 revision of Form 1099-NEC (recipient copy) and the December 2026 Instructions for Forms 1099-MISC and 1099-NEC, which are the revisions for tax year 2026. There is no 2025 equivalent: the 2025 Form 1099-NEC has box 1 for nonemployee compensation, then box 2 for direct sales, and no tips, code or overtime lines. On the December 2026 Form 1099-MISC the same facts sit in boxes 13a, 13b and 14: “Use the amount in box 13a when determining the qualified tip deduction in Part II of Schedule 1-A (Form 1040).” “Use the amount in box 14 when determining the qualified overtime compensation deduction in Part III of Schedule 1-A (Form 1040).” A payer using the 2025 form cannot show these amounts in the boxes described here. Both the December 2026 and the 2025 revisions were being served by irs.gov on 2026-10-16. Check the revision printed on the form you received, because the box numbers differ between the 2025 form and the December 2026 form.
Common mistakes
- Adding box 1b or box 1d to box 1a. The form says “This amount has been included in the amount reported in box 1a.”, so those amounts are already inside the box 1a total.
- Using the box 1b amount for the tip deduction when box 1c holds only 000. The form says “your cash tips are not qualified tips” in that case.
- Counting all overtime pay as box 1d. The payer instructions say “only the “half” portion of “time-and-a-half” compensation would be reported in box 1d”.
Related: Schedule C (Form 1040), self-employment tax explained, first-year estimated taxes for the self-employed, and 1099 basics when you hire help.
Sources
- Form 1099-NEC, Nonemployee Compensation (Rev. December 2026), recipient copy: https://www.irs.gov/pub/irs-pdf/f1099nec.pdf
- Form 1099-MISC, Miscellaneous Information (Rev. December 2026), recipient copy: https://www.irs.gov/pub/irs-pdf/f1099msc.pdf
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026): https://www.irs.gov/pub/irs-pdf/i1099mec.pdf
Read from the IRS documents linked above on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.