No Tax on Tips by State: What a $60,000 Server Actually Keeps in All 50 States
The federal tips deduction saves this server $1,800 in every state. The state part is where it gets interesting. An Oregon server keeps $3,112 in total. A Hawaii server still pays $1,106 in state tax on the same tips.
Key findings
We ran the numbers for one worker in every state. A single server earning $60,000 in 2026, with $15,000 of that in qualified tips, taking the standard deduction.
The federal deduction saves this server $1,800. That number is the same in all 50 states.
Oregon servers keep the most. Oregon passed its own law to honor the deduction, and its tax rates are high. The state benefit adds $1,312, for $3,112 in total savings.
Hawaii keeps the most from the server. It still collects $1,106 in state tax on those tips. Maine takes $1,012 and Minnesota takes $968.
Georgia wrote its own version of the rule. It exempts only $1,750 of tips instead of the federal $25,000. The state benefit works out to $91.
North Dakota technically follows the federal deduction. But this server saves an extra $0 there. Their income sits below the level where North Dakota income tax even starts.
Where servers keep the most
Only four states follow the federal tips deduction. Four more created their own smaller versions. Everywhere else, no tax on tips is federal only.
| State | Federal savings | Extra state savings | Total kept | Note |
|---|---|---|---|---|
| Oregon | $1,800 | $1,312 | $3,112 | Kept tips and overtime via SB 1507 |
| Idaho | $1,800 | $795 | $2,595 | Follows federal taxable income |
| Colorado | $1,800 | $660 | $2,460 | Follows for tips. Taxes overtime from 2026 |
| Michigan | $1,800 | $637 | $2,437 | Own state deduction, 2026 to 2028 |
| Indiana | $1,800 | $442 | $2,242 | Own deduction, 2026 only |
| Arizona | $1,800 | $375 | $2,175 | Administrative rule. Legal footing debated |
| Georgia | $1,800 | $91 | $1,891 | Own version caps at $1,750 of tips |
| North Dakota | $1,800 | $0 | $1,800 | Conforms, but income too low to owe ND tax |
Nine states have no income tax on wages at all. Those are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. A server there keeps the full $1,800 and owes nothing more.
Where tax-free tips are still taxed
Most states start their tax return from your federal AGI. The tips deduction sits below that line, so those states never see it. Unless the legislature acts, they keep taxing every dollar of tips. That covers 27 states plus D.C.
Here is what each one still collects from our server's $15,000 in tips.
| State | State tax still owed on tips | State | State tax still owed on tips |
|---|---|---|---|
| Hawaii | $1,106 | New Mexico | $687 |
| Maine | $1,012 | Nebraska | $682 |
| Minnesota | $968 | Oklahoma | $675 |
| District of Columbia | $920 | Utah | $675 |
| Virginia | $862 | Wisconsin | $660 |
| California | $860 | Mississippi | $600 |
| Kansas | $837 | North Carolina | $598 |
| Delaware | $832 | Arkansas | $585 |
| New Jersey | $830 | Rhode Island | $562 |
| New York | $810 | Kentucky | $525 |
| Connecticut | $775 | Vermont | $503 |
| Alabama | $750 | Pennsylvania | $460 |
| Massachusetts | $750 | Ohio | $412 |
| Illinois | $742 | Maryland | $712 |
These numbers leave out local income taxes. The real gap is wider in places like New York City and Maryland's counties.
Six states where it is still unclear
South Carolina, Missouri, Montana, West Virginia, Iowa, and Louisiana have not settled the question. Bills are pending in several of them. If they do not conform, our server would still owe about $900 in South Carolina, $705 in Missouri, $705 in Montana, $666 in West Virginia, $570 in Iowa, and $450 in Louisiana. Check our conformity tracker before filing.
How we got these numbers
The worker is a single filer. Total 2026 income is $60,000, made up of $45,000 in base wages and $15,000 in qualified tips. They take the standard deduction and have no dependents.
The federal savings come from the 2026 IRS brackets. This taxpayer pays a 12% marginal rate, so deducting $15,000 saves $1,800.
The state figures use each state's 2026 rates, brackets, standard deductions, and personal exemptions as published by the Tax Foundation in January 2026. For each state we computed the tax twice, once with the tips in the base and once without. The difference is the tax on the tips. Local income taxes are excluded. Figures are rounded to the nearest dollar.
Journalists and bloggers are welcome to cite this data with a link to this page.
Frequently asked questions
How much does the no tax on tips deduction save a server?
A single server earning $60,000 with $15,000 in tips saves $1,800 in federal income tax. That is the same in every state. Total savings range from $1,800 to $3,112 depending on the state.
Which state benefits most from no tax on tips?
Oregon. It passed SB 1507 to keep the tips and overtime deductions. Its high rates make the deduction worth an extra $1,312 for this server, the largest state benefit in the country.
Which states still tax tips in 2026?
27 states plus D.C. still tax tips in full. They start from federal AGI and have not passed conformity laws. Hawaii collects the most from our example server at $1,106. Maine and Minnesota are next.
Does California tax tips in 2026?
Yes. California has not conformed to the federal deduction. Our example server still owes about $860 in California state tax on $15,000 of tips.