Does Your Job Qualify for No Tax on Tips?
Treasury has published the list, and it is longer and stranger than most people expect - dishwashers, home plumbers, tutors and gas pump attendants are all on it. But the list only answers half the question. Being in a listed occupation makes you eligible; whether a particular payment is a qualified tip is decided by a separate test that a great deal of published advice skips entirely.
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Two tests, not one
The deduction comes from IRC §224, created by the One Big Beautiful Bill Act, and the final regulations at Treas. Reg. §1.224-1 took effect on 12 June 2026. For money in your pocket to be a qualified tip, five things must all be true:
- It was paid in cash - which includes card, gift card, mobile payment and foreign currency, but expressly excludes digital assets.
- You were working in an occupation on Treasury's list.
- The customer chose to pay it, chose the amount, and could have paid nothing.
- It was not received in a specified service trade or business.
- It was reported - on a W-2, a 1099, or Form 4137.
Almost every page you will find covers point 2 and stops. Points 3 and 5 are where people actually lose the deduction, and point 4 is not settled yet. All four are below the table.
The 71 occupations Treasury listed
Search by job title, by code, or by what you actually do - the descriptions are searchable too, so typing "coffee" or "nails" or "wedding" will find the right row. These are the occupations and definitions as published in the final regulations.
Showing all 71 occupations.
| Code | Occupation | What the regulation says it covers |
|---|---|---|
| 100s · Beverage and Food Service | ||
| 101 | Bartenders | Mix and serve drinks or other refreshments to patrons, directly or through waitstaff. |
| 102 | Wait staff | Take orders and serve food and beverages to patrons at tables in dining establishments or at catered events. |
| 103 | Food or beverage servers, non-restaurant | Serve food or beverages to individuals outside of a restaurant environment, such as in hotel rooms, residential care facilities, or cars. |
| 104 | Dining room and cafeteria attendants and bartender helpers | Facilitate food service; clean tables; remove dirty dishes; set tables; replenish supply of clean linens, silverware, glassware, and dishes; supply service bar with food; and serve items such as water, condiments, and coffee to patrons. |
| 105 | Chefs and cooks | Direct and may participate in the preparation, seasoning, and cooking of salads, soups, fish, meats, vegetables, desserts, or other foods. |
| 106 | Food preparation workers | Perform a variety of food preparation duties other than cooking, such as preparing cold foods and shellfish, slicing meat, and brewing coffee or tea. |
| 107 | Fast food and counter workers | Serve customers at counter or from a steam table; take orders and serve food and beverages; may prepare food and beverages. |
| 108 | Dishwashers | Clean dishes, kitchen, food preparation equipment, or utensils. |
| 109 | Host staff, restaurant, lounge, and coffee shop | Welcome patrons, seat them, and help ensure quality of facilities and service. |
| 110 | Bakers | Mix and bake ingredients to produce breads, rolls, cookies, cakes, pies, pastries, or other baked goods. |
| 200s · Entertainment and Events | ||
| 201 | Gambling dealers | Operate table games at casinos or gaming establishments. |
| 202 | Gambling change persons and booth cashiers | Exchange coins, tokens, and chips for patrons' money; operate booths. |
| 203 | Gambling cage workers | Conduct financial transactions for patrons in gambling establishments. |
| 204 | Gambling and sports book writers and runners | Post information enabling patrons to wager, assist in operation of games, receive and record wagers, pay out winnings. |
| 205 | Dancers | Perform dances. |
| 206 | Musicians and singers | Play one or more musical instruments or sing. |
| 207 | Disc jockeys, except radio | Play prerecorded music for live audiences; may emcee. |
| 208 | Entertainers and performers | Entertain audiences with artistic expression. |
| 209 | Digital content creators | Produce and publish entertainment and personality-driven content on digital platforms. |
| 210 | Ushers, lobby attendants, and ticket takers | Assist patrons at entertainment events: collect tickets, assist seating, locate facilities. |
| 211 | Locker room, coatroom, and dressing room attendants | Provide personal items to patrons in locker rooms, dressing rooms, or coatrooms. |
| 300s · Hospitality and Guest Services | ||
| 301 | Baggage porters and bellhops | Handle baggage for travelers or guests. |
| 302 | Concierges | Assist patrons at hotels or apartment buildings with personal services and arrangements. |
| 303 | Hotel, motel, and resort desk clerks | Register and assign rooms, issue keys, manage records and reservations. |
| 304 | Maids and housekeeping cleaners | Perform any combination of light cleaning duties to maintain commercial establishments, such as hotels, in a clean and orderly manner. Duties may include making beds, replenishing linens, cleaning rooms and halls, and vacuuming. |
| 400s · Home Services | ||
| 401 | Home maintenance and repair workers | Perform work to keep machines, mechanical equipment, or building structure in repair; may maintain furniture or antiques. |
| 402 | Home landscaping and groundskeeping workers | Landscape or maintain grounds using hand or power tools. |
| 403 | Home electricians | Install, maintain, and repair electrical wiring, equipment, and fixtures. |
| 404 | Home plumbers | Assemble, install, alter, and repair pipelines or pipe systems. |
| 405 | Home heating and air conditioning mechanics and installers | Install or repair heating, central air conditioning, HVAC, or refrigeration systems. |
| 406 | Home appliance installers and repairers | Repair, adjust, or install household appliances. |
| 407 | Home cleaning service workers | Perform cleaning duties in private households. |
| 408 | Locksmiths | Repair and open locks; make keys; install and repair safes. |
| 409 | Roadside assistance workers | Provide on-road assistance to drivers whose vehicles have broken down. |
| 500s · Personal Services | ||
| 501 | Personal care and service workers | Provide personalized assistance to individuals with disabilities or illness with daily living tasks. |
| 502 | Private event planners | Coordinate activities and arrangements for private events; may provide decor and creative design. |
| 503 | Private event and portrait photographers | Photograph people, landscapes, or other subjects; may use lighting and editing. |
| 504 | Private event videographers | Operate video or film camera to record images or scenes of private events. |
| 505 | Event officiants | Lead and facilitate ceremonies for life events like weddings or funerals. |
| 506 | Pet and show animal caretakers | Feed, groom, bathe, exercise, and care for pets or show animals. |
| 507 | Tutors | Instruct students in academic subjects in person or remotely. |
| 508 | Nannies and babysitters | Attend to children in businesses or private households; perform tasks like dressing, feeding, bathing. |
| 509 | Visual artists | Create original visual artwork using any of a wide variety of media and techniques. |
| 510 | Floral designers | Design, cut, and arrange live, dried, or artificial flowers and foliage. |
| 600s · Personal Appearance and Wellness | ||
| 601 | Skincare specialists | Provide skincare treatments to face and body to enhance appearance. |
| 602 | Massage therapists | Perform therapeutic massages of soft tissues and joints; may assist in assessment and therapy plans. |
| 603 | Barbers, hairdressers, hairstylists, and cosmetologists | Provide beauty or barbering services like cutting, coloring, styling hair, scalp treatments, shaving. |
| 604 | Shampooers | Shampoo and rinse customer's hair. |
| 605 | Manicurists and pedicurists | Clean and shape customers' fingernails and toenails; may polish or decorate nails. |
| 606 | Eyebrow and eyelash technicians | Enhance and maintain clients' eyebrows using threading, waxing, or tweezing. Enhance clients' eyelashes using tinting or applying extensions. |
| 607 | Makeup artists | Design and apply makeup looks. |
| 608 | Exercise trainers and group fitness instructors | Instruct or coach groups or individuals in exercise activities for personal fitness. |
| 609 | Tattoo artists and piercers | Design and execute tattoos; create openings for jewelry and advise on aftercare. |
| 610 | Tailors | Design, make, alter, repair, or fit garments. |
| 611 | Shoe and leather workers and repairers | Construct, decorate, or repair leather products such as luggage and shoes. |
| 700s · Recreation and Instruction | ||
| 701 | Golf caddies | Assist a golfer during a round by carrying bag, advising on play. |
| 702 | Self-enrichment teachers | Teach individuals or groups for self-enrichment (non-occupational). |
| 703 | Recreational and tour pilots | Pilot aircraft for recreational or touring purposes (excludes commercial airline pilots). |
| 704 | Tour guides | Guide individuals or groups on sightseeing tours. |
| 705 | Travel guides | Plan and conduct long-distance travel, tours, and expeditions. |
| 706 | Sports and recreation instructors | Teach sports or recreational skills for leisure. |
| 800s · Transportation and Delivery | ||
| 801 | Parking and valet attendants | Park vehicles or issue tickets for customers in a parking lot or garage; may collect fee. |
| 802 | Taxi and rideshare drivers and chauffeurs | Drive a motor vehicle to transport passengers on a planned or unplanned basis. |
| 803 | Shuttle drivers | Drive a motor vehicle to transport passengers on a planned route and scheduled basis. Excludes municipal bus and school bus drivers. |
| 804 | Goods delivery people | Drive truck or other vehicle to deliver goods, such as food products, appliances, or furniture, or pick up or deliver packages. May also take orders or collect payment at point of delivery. |
| 805 | Personal vehicle and equipment cleaners | Wash or otherwise clean personal vehicles and equipment. |
| 806 | Private and charter bus drivers | Drive bus or motor coach for charters or private carriage; may assist with baggage. |
| 807 | Water taxi operators and charter boat workers | Operate water taxi boats or provide services to passengers on private charter boats. |
| 808 | Rickshaw, pedicab, and carriage drivers | Operate rickshaw, pedicab, or carriage to transport passengers. |
| 809 | Home movers | Manually move furniture, instruments, art, boxes, luggage to or from homes. |
| 810 | Gas pump attendants | Pump gas for customers at a gas station. May also clean the windshield, check the oil level, or check the tire pressure of the customer's car during refueling. |
| No occupation matches that search. Try a duty rather than a job title - the list is organised by what the work is, not by what your name badge says. | ||
Three of these were added between the proposed rules of September 2025 and the final rules of April 2026: visual artists (509), floral designers (510) and gas pump attendants (810). Any list published before April 2026 is missing them, and a good many still are.
Two things about the list surprise people. The first is that the back of house is on it - chefs and cooks, food preparation workers, dishwashers and bakers all have codes, because tip pools reach them even though customers never hand them anything. The second is the word home doing quiet work in the 400s: electricians, plumbers and HVAC installers qualify for household jobs. The same trade on a commercial contract is not in a listed occupation.
Job titles do not govern. The list describes duties, so a barista matches 107, fast food and counter workers, and a wedding DJ matches 207, disc jockeys, except radio. Match the description, not the name on your badge.
Tip or service charge? The test that decides
This is the half nobody writes about, and it is where the money is. A payment is voluntary only if the customer could have reduced it to zero without consequence, was not negotiated with, and set the amount themselves. Apply that and the awkward cases resolve cleanly:
- The automatic 18% on a party of six is not a tip. The customer could not have declined it, so it is a service charge. It is still wages, it still reaches you, and it is still taxed - it simply is not deductible. If you are working out what a large table owes, the tip calculator splits the bill; just know that an automatic gratuity already on the bill is a different animal from what you add on top.
- A card terminal offering 15%, 18%, 20%, other and no tip produces a qualified tip at whatever the customer picks. The presence of a genuine zero option is what makes the whole amount voluntary.
- A terminal with no way to decline does not. Where a minimum is forced, only the amount the customer adds above that floor is voluntary.
- Crypto is out. Digital assets as defined in §6045(g)(3)(D) are not cash tips, and Treasury declined to carve out stablecoins pending GENIUS Act rulemaking - so a tip in USDC does not qualify even though it tracks a dollar.
- Non-cash gifts are out. Event tickets, merchandise and similar are not cash tips.
Five things most explanations get wrong
- A manager taking from the tip pool does not get the deduction. The final regulations state that amounts a manager or supervisor receives through a voluntary or mandatory tip-sharing arrangement are not qualified tips - even in a listed occupation. Tips the same person earns directly from customers they personally served can still qualify. Almost every page that says "tip pooling qualifies" states it flatly, and that is incomplete.
- Owning 5% of the business ends it. There is an irrebuttable presumption that an amount is recharacterised wages, not a tip, where the employer is the payor or the recipient holds a direct ownership interest - defined as 5% or more of stock by vote or value, or a 5% profits or capital interest in a partnership. The owner-operator stylist who runs tips through her own salon is the case this was written for.
- The SSTB paragraph is deliberately blank. Treasury reserved §1.224-1(g) rather than write the specified-service-trade-or-business rule, and Notice 2025-69 provides transition relief treating anyone in a listed occupation as not being in an SSTB until 1 January following the eventual final rules. That relief matters most to the occupations that sit inside §199A's SSTB fields anyway - performing arts covers dancers, musicians and entertainers; health arguably reaches massage therapists. It holds today. It is the one rule on this page that could still move.
- Unreported cash tips are not deductible. §224(a) allows the deduction only for tips shown on an information statement or reported by you on Form 4137. Keeping cash off the books does not save the tax now - it forfeits the deduction, and payroll tax is owed either way.
- $25,000 is per return, not per person. Two tipped spouses filing jointly share one $25,000 cap, not two. And married filing separately cannot claim it at all.
What it is actually worth
"No tax on tips" is a deduction against federal income tax only. Social Security and Medicare are untouched, which is the gap between the slogan and the stub. A single server on $46,000, of which $18,000 is qualified tips, using the 2026 standard deduction of $16,100:
| Without the deduction | With it | |
|---|---|---|
| Taxable income | $29,900 | $11,900 |
| Federal income tax | $3,340 | $1,190 |
| FICA on the same $18,000 of tips | $1,377 | $1,377 |
| Total federal tax | $4,717 | $2,567 |
The deduction saves $2,150 - more than a flat 12% of the tips, because it drops this filer out of the 12% bracket and back into the 10% one. And $1,377 of federal tax on those same tips survives untouched, because FICA is charged on tips whether or not they are deductible. Run the full picture through the paycheck calculator if you want your own numbers.
Four limits worth knowing. The cap is $25,000, reduced by $100 for every $1,000 of modified AGI over $150,000 ($300,000 joint) - which is ten cents of deduction per dollar of income, so it reaches zero at $400,000 single and $550,000 joint. If you are self-employed, the deduction cannot exceed the net income of the business the tips came from. It reduces taxable income but not AGI, so states that start from federal AGI will generally not pass the saving through - check your own state. And the whole provision expires after 31 December 2028 unless Congress extends it.
What has to be on your W-2
From the 2026 tax year, employers report qualified tips in Box 12 under code TP and your Treasury tipped occupation code in the new Box 14b. If you hold two tipped jobs, expect two codes. Check both boxes when the form arrives - a missing or wrong occupation code is the likeliest way to lose a deduction you are entitled to.
2025 works differently, and this catches people. Forms were not changed for 2025, and Notice 2025-62 relieved employers of penalties for not reporting tips separately, so there is no Box 12 code TP on a 2025 W-2. You establish the amount from Box 7 social security tips, from Forms 4070 you filed, from Box 14 if your employer volunteered it, or from Form 4137 line 4. If you are not an employee, contemporaneous records do the job - point-of-sale reports, daily tip logs, settlement records. And if you already filed a 2025 return without claiming this, the IRS's position is that you may amend on Form 1040-X.
FAQ
My exact job title is not on the list. Am I out?
Not necessarily. The list is written as occupations with duty descriptions, not as job titles, so the question is whether your work matches a description. A barista is not listed by that name but falls under 107, fast food and counter workers. If nothing on the list describes what you do, then the occupation test is not met - Treasury built the list from occupations that customarily and regularly received tips on or before 31 December 2024, and it is closed unless the rules are amended.
Does the automatic gratuity on my large tables count?
No. A charge the customer could not have reduced to zero is a service charge, not a tip. It remains taxable wages to you; it simply is not eligible for the deduction. Anything the customer chooses to add on top of it is.
I am paid out of a tip pool. Do I qualify?
Yes, if you are in a listed occupation and the money originated as voluntary customer tips - tip-sharing arrangements are expressly included, which is how dishwashers and cooks come to be on the list at all. The exception is managers and supervisors, whose share from a pool is not a qualified tip.
Does this cut my Social Security and Medicare tax?
No. The deduction applies to federal income tax only. Tips remain fully subject to FICA, they still count toward your Social Security earnings record, and your employer still owes its matching share.
Do I still have to report cash tips to my employer?
Yes - the monthly $20 threshold is unchanged, and reporting is now what makes the deduction available rather than merely a compliance duty. Unreported tips are not deductible tips.
Figures last verified: September 2026. Occupation list, codes and definitions: Treas. Reg. §1.224-1, final regulations published in the Federal Register 13 April 2026 (document 2026-07104), effective 12 June 2026, as republished by the IRS at irs.gov/tippedoccupations - all 71 rows reproduced in full above. Deduction, $25,000 cap, $100-per-$1,000 phase-out, SSN and joint-return conditions and the 2028 sunset: IRC §224(a), (b), (e), (f), (h). SSTB transition relief and 2025 substantiation: IRS Notice 2025-69; employer penalty relief: Notice 2025-62. Box 12 code TP and Box 14b: 2026 General Instructions for Forms W-2 and W-3. Amended returns for 2025: IRS guidance on Form 1040-X. 2026 standard deduction of $16,100 and the 10% and 12% bracket boundaries: IRS Rev. Proc. 2025-32. The worked figures above are computed from those rates, not copied.
💡 Did you know?
In United States v. Fior D'Italia (decided 17 June 2002, 6–3), the Supreme Court let the IRS work out a San Francisco restaurant's unreported cash tips by estimating them from its credit card slips. The agency measured the average card tip - 14.49% in 1991, 14.29% in 1992 - assumed cash customers tipped at about the same rate, applied it to total receipts, and billed the restaurant for the FICA on the difference. That produced estimated unreported tips of roughly $156,545 and $147,529 and assessments of $11,976 and $11,286. The restaurant argued the IRS had to work employee by employee. It lost - which is a large part of why tip reporting is taken as seriously as it is.