It sounds like your question is whether you should use 12P code, even though TT says it's only for military. It sounds like you have your answer. True, it's only for military starting in 2018, but you are showing a 12P on your w2 and you need to properly report the w2 as you received it, so you should record this code.
The problem is what it does with your taxes, since the tax code went through a big change. So you need to know how your tax should actually be computed, and whether you need to do something additional since you are having income reported in 2018 that was from 2017, and it might not be deductible in 2018.
So, 1) yes, you report the w2 just like you received it, regardless of the TT explanation (which is now correct, but your employer is saying is also correctly reported in this transient (pun) situation even though you're not military.)
2) You're still responsible for properly paying your tax, regardless of how your employer reports it or TT computes it, so you want to verify this [or forget it, since it would be an unintentional error on your part and no one is likely to ever look at this again, anyway. If the IRS comes back and says you owe additional tax, you should be prepared to immediately pay it, with interest, but ask for a waiver on any penalties. But this is almost always true regardless :-)]
3) If you decide, based on tax law, that your w2 code is resulting in you not paying tax you should pay, you can make an additional entry for this separate from the w2 with an explanatory statement.
4) If this sounds too complicated, or the amount is large and you are still unsure, this is a good reason to complete your taxes as best you can, then take it to a CPA or other tax professional for review, and flag this particular concern to be sure they address it in their review for you.
