The tips deduction isn't for every tip. It's for workers in occupations that customarily and regularly received tips on or before December 31, 2024. Treasury and the IRS published that list, and final rules on April 13, 2026 confirmed it with eight groups of jobs.
Occupations that qualify
| Group | Examples on the list |
|---|---|
| Beverage and food service (100s) | Bartenders, wait staff, non-restaurant food servers, dining room attendants and bartender helpers, chefs and cooks, food preparation workers, fast food and counter workers, dishwashers, restaurant and coffee shop host staff, bakers |
| Entertainment and events (200s) | Gambling dealers, change persons and cage workers, sports book writers and runners, dancers, musicians and singers, DJs, entertainers and performers, ushers and ticket takers, locker room and coatroom attendants |
| Hospitality and guest services (300s) | Baggage porters and bellhops, concierges, hotel and resort desk clerks, maids and housekeeping cleaners |
| Home services (400s) | Home maintenance and repair workers, landscapers, home electricians, plumbers, HVAC installers, appliance repairers, home cleaners, locksmiths, roadside assistance workers |
| Personal services (500s) | Personal care workers, private event planners, event photographers and videographers, officiants, pet caretakers, tutors, nannies and babysitters; the final rules added visual artists and floral designers |
| Personal appearance and wellness (600s) | Skincare specialists, massage therapists, barbers, hairdressers and cosmetologists, shampooers, manicurists and pedicurists, threading and waxing technicians, makeup artists, personal trainers and fitness instructors, tattoo artists and piercers, tailors, shoe repairers |
| Recreation and instruction (700s) | Golf caddies, self-enrichment teachers, recreational and tour pilots, tour and travel guides, sports and recreation instructors |
| Transportation and delivery (800s) | Parking and valet attendants, taxi and rideshare drivers and chauffeurs, shuttle drivers, delivery drivers, car and equipment cleaners, charter bus drivers, water taxi and charter boat workers, pedicab and carriage drivers, home movers; the final rules added gas pump attendants |
Each job has a Treasury Tipped Occupation Code (TTOC), and from 2026 employers report it with your tips. For your exact job, check Table 1 in the final regulations (26 CFR 1.224-1(f)).
The other requirements
- The tip was voluntary: the customer chose whether and how much to tip.
- It's reported on your W-2 (box 12, code TP from 2026), a Form 1099, or on Form 4137 if you report it yourself.
- You have a Social Security number valid for work. If married, you file jointly.
- Your modified AGI is under $150,000 ($300,000 joint) for the full deduction; above that it shrinks.
Qualify? See your number with the no tax on tips calculator.
Common questions
Who qualifies for no tax on tips?
Workers in an occupation on the Treasury's list of jobs that customarily and regularly received tips before 2025, who receive voluntary tips, have a Social Security number valid for work, and file jointly if married. Income limits apply above $150,000 ($300,000 joint).
Do DoorDash, Uber Eats and Instacart drivers qualify?
Delivery people are on the list, so tips from customers can qualify. As a self-employed worker, your deduction can't be more than your net profit from that work.
Do Uber and Lyft drivers qualify?
Yes. Taxi and rideshare drivers and chauffeurs are on the list.
Is it only for cash tips?
No. Cash, card, check, gift card and app tips all count, as long as the customer chose to leave them. Tips received through a tip pool or tip sharing count too.
Do automatic service charges count?
Generally no. A mandatory service charge isn't voluntary. It only counts if the customer can change or refuse it.
Who doesn't qualify?
People whose job isn't on the list, people working in a specified service trade or business under section 199A (such as health, law or the performing arts as a business), employees of such a business, and married people filing separately.
Other new deductions
Sources
- IRS FS-2025-03: Tax deductions for working Americans and seniors
- IRS: Tax year 2026 inflation adjustments (Rev. Proc. 2025-32)
- IRS: Schedule 1-A and instructions
- IRS: final regulations listing tipped occupations (April 2026)
- Federal Register: final rule, April 13, 2026
See how Taxlumo calculates for every formula and test case.