No Tax on Tips for 2025 through 2028
Employees that traditionally receive voluntary tips from customers can deduct up to $25,000 of tips from their taxable income.
Things to Know About No Tax on Tips
The Basics of the Tips Deduction
- Taxpayers in traditionally tipped industries can claim an income tax deduction on their individual income tax return of up to $25,000 for tips included in their gross income.
- Qualifying tips must be reported to the employer, and social security and Medicare taxes paid.
- Mandatory service charges added to the bill of customers don't qualify for the tip deduction.
- Qualifying tips include those received in cash, by credit card, and via tip-sharing arrangements.
Industries that Qualify for the Tips Deduction
Beverage & Food Service
Transportation & Delivery
Beverage & Food Service
- Bartenders
- Wait Staff
- Non-restaurant Food Servers
- Dining Room, Cafeteria, & Bar Helpers
- Chefs & Cooks
- Food Prep Workers
- Fast Food & Counter Workers
- Dishwashers
- Host Staff
- Bakers
Entertainment & Events
Transportation & Delivery
Beverage & Food Service
- Gambling Dealers
- Gambling Cashiers
- Gambling Cage Workers
- Sports Book Writers & Runners
- Dancers
- Musicians & Singers
- DJs (except radio)
- Entertainers & Performers
- Digital Content Creators
- Ushers, Lobby Attendants, & Ticket Takers
- Locker, Coat, & Dressing Room Attendants
Transportation & Delivery
Transportation & Delivery
Transportation & Delivery
- Parking Attendants
- Taxi & Rideshare Drivers & Chauffeurs
- Shuttle Drivers
- Goods Delivery People
- Personal Vehicle & Equipment Cleaners
- Private & Charter Bus Drivers
- Water Taxi Operators
- Charter Boat Workers
- Richshaw, Pedicab, Carriage Drivers
- Home Movers
Home Services
Personal Appearance & Wellness
Transportation & Delivery
- Home Maintenance & Repair
- Home Landscaping & Groundskeeping
- Home Electricians
- Home Plumbers
- Home HVAC Workers
- Home Appliance Installers & Repair
- Home Cleaning Service Workers
- Locksmiths
- Roadside Assistance Workers
Personal Services
Personal Appearance & Wellness
Personal Appearance & Wellness
- Personal Care & Service Workers
- Private Event Planners
- Private Event & Portrait Photographers & Videographers
- Event Officiants
- Pet Caretakers
- Tutors
- Nannies & Babysitters
Personal Appearance & Wellness
Personal Appearance & Wellness
Personal Appearance & Wellness
- Skincare Specialists
- Massage Therapist
- Hairdressers & Cosmetelogists
- Shampooers
- Manicurists & Pedicurists
- Eyebrow Threading & Waxing
- Makeup Artists
- Exercise Trainers & Instructors
- Tattoo Artists
- Shoe & Leather Workers & Repairers
Hospitality & Guest Services
Hospitality & Guest Services
Hospitality & Guest Services
- Baggage Porters & Bellhops
- Concierges
- Hotel & Resort Desk Clerks
- Maids & Housekeepers
Recreation & Instruction
Hospitality & Guest Services
Hospitality & Guest Services
- Golf Caddies
- Self-Enrichment Teachers
- Recreational & Tour Pilots
- Tour Guides & Escorts
- Travel Guides
- Sports & Recreation Instructors