No Tax on Tips: Which Jobs Qualify?
The deduction only applies to occupations on the official IRS list. Here are the main categories, explained simply.
From 2025 through 2028, tipped workers can deduct up to $25,000 of tips from their federal taxable income. But the job matters. The IRS published a list of occupations that customarily received tips before 2025. If your job is on it, your tips qualify.
The main qualifying categories
Food and drink service
Servers, bartenders, baristas, bussers, hosts, fast food workers, cooks in tipped pools, and food delivery drivers. This is the biggest group.
Transportation and delivery
Rideshare drivers, taxi drivers, delivery drivers, valets, shuttle drivers, and movers. Gig workers on apps count if their work is a listed occupation.
Beauty and personal care
Hair stylists, barbers, nail techs, estheticians, massage therapists, and tattoo artists.
Hospitality and events
Hotel housekeepers, bellhops, concierges, casino dealers, banquet staff, and event workers.
Home and personal services
House cleaners, pet sitters and groomers, golf caddies, tour guides, and locksmiths, among others.
The rules that trip people up
The tip must be voluntary. A required 20% service charge on a large party is not a tip under this law. Cash tips, card tips, and tip pool shares all count. You still report every tip to your employer as before. And you still pay Social Security and Medicare tax on tips. This deduction only cuts your federal income tax.
High earners get less. The deduction shrinks once your income passes $150,000, or $300,000 for a married couple.
Self employed and gig workers
You can claim it too, if your occupation is listed. Your deduction cannot be larger than your net profit from that work.
See your savings in 20 seconds
A server making $22,000 in tips at the 12% bracket saves about $2,640 a year. Try your own numbers in our free tips deduction calculator. No signup. Nothing you type leaves your browser.
Frequently asked questions
Do DoorDash and Uber Eats tips count?
Yes. Delivery and rideshare driving are on the IRS list. Tips added by customers in the app qualify. But gig workers have a net profit cap. Read the full gig worker tips deduction guide.
Are mandatory service charges considered tips?
No. A required 20 percent service charge on a large party is not a tip under this law. Only voluntary tips from customers count.
Do you still pay Social Security on tips?
Yes. This deduction only removes federal income tax. Social Security and Medicare still come out of every dollar of tips. Read more about tips and Social Security.
What is the tips deduction worth?
A server making $22,000 in tips at the 12 percent bracket saves about $2,640 a year. Try the free tips calculator with your own numbers.