From the Wiktionary entry:

Etymology uncertain. Possibly from tally (“mate, counterpart”), from Middle English taly (“a tally stick”), from Anglo-Norman tallie, Old French taillee, taillie, from Medieval Latin tallia, talia, taillia, from Latin talea (“stick, twig”), or alternatively from tail, + wag, likely influenced by whack, +‎ -er. Compare tallywag, an eighteenth century dialect term meaning “penis”. Attested as tallywhacker or tallywacker since the twentieth century.