- The Treasury Department has released a list of 68 professions eligible for the new “no tip tax” deduction.
- The deduction allows up to $25,000 per year and applies to tip wages reported on a W‑2, 1099, or Form 4137.
- The phaseout begins for households earning more than $150,000 (or $300,000 for joint applicants).
President Trump’s Big Beautiful Bill (OBBBA) introduced a new provision that gives a tax deduction on tips to a specific group of workers. As part of the new law, the Treasury Department had to create a list of eligible jobs – and we have that list!
according to AxiosThe Treasury described the list as “extensive but fair.” It groups the 68 occupations into eight categories, ranging from traditional restaurant roles to specialized service jobs.
Starting this tax year (when workers file their taxes between January and April next spring), many workers who routinely receive cash tips will now be able to claim a tax break that could meaningfully increase their wages.
How does the tax deduction work?
The rule, effective for tax years 2025 through 2028, allows employees and self-employed individuals to deduct “qualified tips,” which are defined as voluntary cash or tipped tips received from customers or shared among employees. The maximum annual deductible is $25,000. For self-employed workers, the deduction cannot exceed the net income generated by the company that generated the tips.
Eligibility does not depend on whether the taxpayer itemizes deductions: both itemizers and non-itemizers may claim the benefit. However, certain self-employed professionals who operate within a specified service trade or business (SSTB) are excluded under section 199A, as are employees whose employers are in the SSTB.
To claim the deduction, taxpayers must list their Social Security number on the return, and if they are married, they must file jointly (you cannot file your taxes “married filing separately” and claim the deduction). Employers are required to file information returns with the IRS (or Social Security Administration) and provide workers with statements detailing the cash tips received and the corresponding occupation. This will usually be included on Form W2.
The Treasury Department has set a deadline of October 2, 2025, for the IRS to publish the official job listing in the Federal Register, along with guidance on reporting requirements.
What jobs qualify for “no tax on tips”
According to an Axios report, the following job listing is scheduled to be published in the Federal Register this week:
Beverage and food service
- Bartenders
- Wait staff
- Food servers, non-restaurants
- Dining room and cafeteria attendants and waiter assistants
- Chefs and chefs
- Food preparation workers
- Fast food workers and counter
- Dishwashers
- Host staff, restaurant, lounge and café
- bakers
Entertainment and events
- Gambling dealers
- Gambling changes people and cashier booths
- Gambling cage workers
- Writers and runners of gambling and sports books
- Dancers
- Musicians and singers
- Disc players (except radio)
- Artists and performers
- Digital content creators
- Ushers, lobby attendants, and ticket takers
- Locker room, cloak room, and locker room attendants
Hospitality and guest services
- Baggage Porters and Bellhops
- Doormen
- Desk clerks for hotels, motels, and resorts
- Maids and house cleaners
Home services
- Home maintenance and repair workers
- Home gardening and landscaping workers
- Home electricians
- Home plumbers
- Home heating and air conditioning mechanics and installations
- Home appliance installers and repairmen
- Home cleaning service workers
- Locksmiths
- Roadside assistance workers
Personal services
- Personal care and service workers
- Special event planners
- Special occasion and portrait photographers
- Videographers for special events
- Event officials
- Pet caretakers
- Teachers
- Nannies and nannies
Personal appearance and health
- Skin care specialists
- Massage therapists
- Barbers, hairdressers, hairdressers and beauticians
- Shampoo
- Manicurists and pedicurists
- Threading and waxing technicians
- Makeup artists
- Aerobics instructors and group fitness trainers
- Tattoo artists and piercers
- Tailors
- Shoe and leather workers and repairmen
Entertainment and education
- Golf caddy
- Self-enrichment teachers
- Recreational pilots and tours
- Tour guides and escorts
- Travel guides
- Sports and entertainment coaches
Transportation and delivery
- Parking and valet service
- Taxi and Rideshare drivers and drivers
- Shuttle drivers
- People deliver goods
- Vehicle and personal equipment cleaners
- Private and charter bus drivers
- Water taxi operators and charter boat operators
- Drivers of carts, rickshaws and carts
- Home Movers
What this means for tipped workers
For many families, especially those that rely on multiple part-time or temporary jobs, the ability to shelter tips from taxes can translate into notable benefits. This can help with your monthly budget goal, pay off student loan debt, and more.
The phaseout thresholds ($150,000 for single filers and $300,000 for joint filers) make the benefit primarily supportive of middle-income earners. Families with gross income below these limits can keep more of the money earned through tips.
Beyond direct personal gain, this policy may influence employers to better report tips and invest in tools that make tipping easier.
in general, The “no tax on tips” requirement. It represents a targeted effort to recognize the value of tip-based compensation across a broad spectrum of the economy. When the IRS finalizes the occupational list and related rules, workers and families should be prepared to claim the deduction on their next tax returns.
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