Employer doesn't, report ANY TIPS, on W2. I was told never, some kind of code system they go by.
Code system? It's called "illegal activity" and your employer does that so that they don't have to pay their share of your taxes on it. Just do as rjs says below and enter them as unreported tips so as to cover yourself legally with the IRS. If you're employer has any issues with the IRS because of it, that's their problem.
The employer doesn't have a choice about whether or not to include your tips on your W-2. If they didn't include the tips, the W-2 is not correct. You should ask the employer for a corrected W-2 with the tips included.
If you cannot get a corrected W-2, you can enter them as unreported tips in TurboTax. First enter your W-2. After you enter your W-2 you will come to a screen that says "Do any of these uncommon situations apply to this W-2?" That screen has a long list of check boxes. One of the boxes says "Unreported tips." Check that box and continue through the interview to report the tips. The unreported tips will be added to the wages on your tax return. Form 4137 will be included in your return to calculate the Social Security and Medicare taxes on the tips, and these taxes will be added to the tax on your return.
Doing this will require you to upgrade to a paid version of TurboTax Online. You cannot file with unreported tips in TurboTax Free Edition.
I appreciate the responses here. For years I have been told that I don't need to report my tips to my employer. Last year I thought it would help on my taxes if I DID report my tips. So I reported my tips all year long. Then my employer told me that what I reported to her was not included in my W-2 but only the tips that were given online when my customers paid at the front desk. My cash tips were not included. Now I'm reading online that I may pay a penalty for not reporting tips. I'm confused about all of this. Why would Tax services charge me to report unreported tips that will make my return lower and possibly cost me a penalty?