your w-2 is wrong and needs to be corrected. here's what the IRS says about tip-outs.
Do I have to report tip-outs that I pay to other employees?
No. You report to your employer only the amount of tips you
retain. However, you must maintain records of tip-outs with
your other tip income (cash tips, charged tips, split tips, tip
pool)
https://www.irs.gov/pub/irs-pdf/p3148.pdf
this is from another thread from 2020 but it is incorrect in that it only supposed to be used for tip-outs from unreported tips which is not your situation:
- After you enter your W-2 in TurboTax, you will the screen "Let's check for uncommon situations."
- Select Unreported tips, then continue
- On "Let's confirm your allocated tips from xxxx" select Yes or No, depending on whether your allocated tips are correct
- On "Now let's enter your unreported tips," enter the amounts of Total tips that you paid out through tip-sharing
reporting tip-outs on unreported tips without a greater amount for unreported tips will likely get you an inquiry from the iRS
if your employer will not correct the w-2 you'll likely be on the hook for those income taxes
