No Tax on Tips Calculator
Check whether your job is on the IRS list and how much of your tip income you can deduct from federal income tax — up to $25,000 per return, reduced once income passes $150,000 ($300,000 joint).
Is this the right calculator?
Use it when
- You receive voluntary tips from customers, including through a tip pool
- Your job is one of the 71 occupations on the Treasury list
- You want the deduction for tax years 2025, 2026, 2027 or 2028
- You file single, head of household, or married filing jointly
Checking whether your employer paid at least minimum wage with tips? That is a different rule. Tip Credit Calculator
Calculator
Deduction for qualified tips under 26 U.S.C. §224, following IRS Schedule 1-A, Part II.
From 2026 your employer shows this code in Form W-2, box 14b.
Your tips deduction (2026)
$18,000.00
≈ $2,160.00 less federal income tax at a 12% bracket
- Qualified tips
- $18,000.00
- Voluntary, listed job
- After limit
- $18,000.00
- Limit $25,000 per return
- Income phase-out
- − $0.00
- Above $150,000.00
- Deduction
- $18,000.00
Estimated 2026 tips deduction: $18,000.00 (Wait Staff, TTOC 102). Qualified tips: $18,000.00; after the $25,000 limit: $18,000.00. At a 12% bracket that is about $2,160.00 less federal income tax.
From tax year 2026, employee tips come from Form W-2, box 12, code TP, with the occupation code in box 14b.
This is a federal income tax deduction only. Tips are still subject to Social Security and Medicare taxes, and state income tax treatment depends on your state. Tips earned in a specified service trade or business (such as health, law or consulting) are excluded by statute, but the IRS will not enforce that rule until after it issues final regulations on it (Notice 2025-69). Not tax advice.
Formula (Schedule 1-A, Part II)
Worked examples
Server, single
- Tips on W-2 code TP: $18,000 (Wait Staff, 102)
- Below the $25,000 limit
- MAGI $52,000 — no reduction
- Deduction: $18,000
- At a 12% bracket ≈ $2,160 less income tax
Two bartenders, filing jointly
- Tips: $15,000 + $20,000 = $35,000
- One limit per return → $25,000
- MAGI $120,000 — below $300,000
- Deduction: $25,000 (the regulation's own example)
Qualifying occupations (71)
Treasury Tipped Occupation Codes from Treas. Reg. §1.224-1(h), Table 1. The list is exhaustive: a job not on it does not qualify. Assistants and apprentices qualify when they perform the same services.
Beverage and Food Service 10 jobs
- 101 Bartenders
- 102 Wait Staff
- 103 Food or Beverage Servers, Non-restaurant
- 104 Dining Room and Cafeteria Attendants and Bartender Helpers
- 105 Chefs and Cooks
- 106 Food Preparation Workers
- 107 Fast Food and Counter Workers
- 108 Dishwashers
- 109 Host Staff, Restaurant, Lounge, and Coffee Shop
- 110 Bakers
Entertainment and Events 11 jobs
- 201 Gambling Dealers
- 202 Gambling Change Persons and Booth Cashiers
- 203 Gambling Cage Workers
- 204 Gambling and Sports Book Writers and Runners
- 205 Dancers
- 206 Musicians and Singers
- 207 Disc Jockeys, Except Radio
- 208 Entertainers and Performers
- 209 Digital Content Creators
- 210 Ushers, Lobby Attendants, and Ticket Takers
- 211 Locker Room, Coatroom, and Dressing Room Attendants
Hospitality and Guest Services 4 jobs
- 301 Baggage Porters and Bellhops
- 302 Concierges
- 303 Hotel, Motel, and Resort Desk Clerks
- 304 Maids and Housekeeping Cleaners
Home Services 9 jobs
- 401 Home Maintenance and Repair Workers
- 402 Home Landscaping and Groundskeeping Workers
- 403 Home Electricians
- 404 Home Plumbers
- 405 Home Heating and Air Conditioning Mechanics and Installers
- 406 Home Appliance Installers and Repairers
- 407 Home Cleaning Service Workers
- 408 Locksmiths
- 409 Roadside Assistance Workers
Personal Services 10 jobs
- 501 Personal Care and Service Workers
- 502 Private Event Planners
- 503 Private Event and Portrait Photographers
- 504 Private Event Videographers
- 505 Event Officiants
- 506 Pet and Show Animal Caretakers
- 507 Tutors
- 508 Nannies and Babysitters
- 509 Visual Artists
- 510 Floral Designers
Personal Appearance and Wellness 11 jobs
- 601 Skincare Specialists
- 602 Massage Therapists
- 603 Barbers, Hairdressers, Hairstylists, and Cosmetologists
- 604 Shampooers
- 605 Manicurists and Pedicurists
- 606 Eyebrow and Eyelash Technicians
- 607 Makeup Artists
- 608 Exercise Trainers and Group Fitness Instructors
- 609 Tattoo Artists and Piercers
- 610 Tailors
- 611 Shoe and Leather Workers and Repairers
Recreation and Instruction 6 jobs
- 701 Golf Caddies
- 702 Self-Enrichment Teachers
- 703 Recreational and Tour Pilots
- 704 Tour Guides
- 705 Travel Guides
- 706 Sports and Recreation Instructors
Transportation and Delivery 10 jobs
- 801 Parking and Valet Attendants
- 802 Taxi and Rideshare Drivers and Chauffeurs
- 803 Shuttle Drivers
- 804 Goods Delivery People
- 805 Personal Vehicle and Equipment Cleaners
- 806 Private and Charter Bus Drivers
- 807 Water Taxi Operators and Charter Boat Workers
- 808 Rickshaw, Pedicab, and Carriage Drivers
- 809 Home Movers
- 810 Gas Pump Attendant
Frequently asked questions
Are all my tips tax-free?
No. Tips stay taxable income, but you can deduct up to $25,000 of qualified tips from federal taxable income for tax years 2025 through 2028. Tips are still subject to Social Security and Medicare taxes.
Is the $25,000 limit per person or per return?
Per return. Treasury regulations apply the limit regardless of filing status, so a married couple filing jointly shares one $25,000 limit even if both spouses receive tips.
How does the income phase-out work?
If modified adjusted gross income is above $150,000 ($300,000 on a joint return), the deduction drops by $100 for each full $1,000 over the threshold. Schedule 1-A tells you to round the excess down to whole thousands before multiplying.
Which jobs qualify?
Only occupations on the Treasury list of jobs that customarily and regularly received tips on or before December 31, 2024 — 71 occupations in 8 categories, from bartenders and wait staff to hairstylists, rideshare drivers, tutors and digital content creators. The final rule added visual artists, floral designers and gas pump attendants.
Do tips from a tip pool count?
Yes. Tips received through a mandatory or voluntary tip-sharing arrangement, such as a tip pool, can be qualified tips, as long as your own occupation is on the list.
Do automatic service charges count?
No. A mandatory or automatic service charge, such as an 18% charge for large parties, is not a tip even if it is passed on to staff. A tip must be voluntary, not negotiated, and its amount decided by the customer.
Where do I find my tip amount on my W-2?
From tax year 2026, employers report cash tips in Form W-2, box 12, code TP, and the occupation code in box 14b. A code of 000 means some tips came from a non-qualifying occupation. For 2025, you could use box 7, Form 4137 or an employer statement.
I am self-employed. Can I claim it?
Yes, if your occupation is on the list. The deduction for self-employment tips cannot exceed your net profit from that business.
Can I claim both no tax on tips and no tax on overtime?
Yes. They are separate parts of Schedule 1-A with separate limits: $25,000 for tips and $12,500 ($25,000 joint) for qualified overtime. The same dollars cannot count as both.
Can married couples filing separately claim it?
No. Married taxpayers must file a joint return. The Social Security number of the person who received the tips must be on the return.
Sources
- 26 U.S.C. §224 — Qualified tips (added by Pub. L. 119-21, July 4, 2025)
- Treasury/IRS — TD 10044, final regulations and occupation list (91 FR 19026, April 13, 2026)
- IRS — Schedule 1-A (Form 1040), Part II
- IRS — Notice 2025-69 (2025 substantiation; SSTB enforcement relief)
- IRS — IR-2026-49: final regulations listing tipped occupations
- IRS — Draft 2026 Instructions for Forms W-2 and W-3 (code TP, box 14b)
What to check next
Related calculators
Built and maintained by Sabrina Perez. This calculator is checked by automated tests against official worked examples — how we test.