United States · Federal·Updated for 2026·Figures in USD · federal income tax only
No Tax on Tips Calculator (2026)
Tips are not tax-free, but from 2025 through 2028 you can deduct up to $25,000 of qualified tips from your federal taxable income, if your job is on the IRS list. Pick your occupation and enter your tips and income to see how much you can deduct and what it saves you.
Your 2026 tips
From the IRS list of tipped occupations
$
Voluntary cash and card tips, including shared tips. From 2026, your W-2 box 12 code TP
$
Including your tips. Used as your modified AGI for the phase-out
Pick your occupation and enter your tips and income. Your deduction appears here as you type — there is no button to press.
Calculating
Show the mathSee how this was worked outHide
Federal income tax only, worked through the 2026 brackets with the standard deduction. Social Security, Medicare and most state income taxes still apply to tips. Your income is treated as your modified AGI.
Updated ·Source: IRS·Runs entirely in your browser — nothing is uploaded
No. Tips are still income, and you still report them. What changed is a new federal deduction: from 2025 through 2028, you can deduct up to $25,000 of qualified tips a year when you file. It lowers your federal income tax only. Tips are subject to federal income tax and generally are also subject to Social Security and Medicare taxes; the deduction lowers federal income tax only.Whether your state taxes tips is set by your state. The deduction is available whether you itemize or take the standard deduction.
What counts as a qualified tip
Qualified tips are voluntary cash or charged tips received from customers, including shared tips.
They must be paid voluntarily by the customer and not be subject to negotiation; mandatory service charges are not tips unless the customer can change them.
They can be paid in cash or an equivalent such as a check, credit card, debit card or gift card, and include tips received through a mandatory or voluntary tip-sharing arrangement such as a tip pool.
Tips count only if they are reported on Form W-2, Form 1099-NEC, Form 1099-MISC or Form 1099-K, or reported by the worker on Form 4137.
Which jobs qualify
The tips must be received in an occupation on the IRS list of occupations that customarily and regularly received tips on or before December 31, 2024. There are 71 occupations on the list, in 8 groups. If your job is not on it, your tips do not qualify. Self-employed people in a specified service trade or business (SSTB) under section 199A are not eligible, and employees whose employer is in an SSTB are not eligible. For 2025 only, the IRS said it would not enforce this restriction.
Beverage and food service
Bartenders
Wait staff
Food or beverage servers, non-restaurant
Dining room and cafeteria attendants and bartender helpers
Chefs and cooks
Food preparation workers
Fast food and counter workers
Dishwashers
Host staff, restaurant, lounge, and coffee shop
Bakers
Entertainment and events
Gambling dealers
Gambling change persons and booth cashiers
Gambling cage workers
Gambling and sports book writers and runners
Dancers
Musicians and singers
Disc jockeys, except radio
Entertainers and performers
Digital content creators
Ushers, lobby attendants, and ticket takers
Locker room, coatroom, and dressing room attendants
Hospitality and guest services
Baggage porters and bellhops
Concierges
Hotel, motel, and resort desk clerks
Maids and housekeeping cleaners
Home services
Home maintenance and repair workers
Home landscaping and groundskeeping workers
Home electricians
Home plumbers
Home heating and air conditioning mechanics and installers
Home appliance installers and repairers
Home cleaning service workers
Locksmiths
Roadside assistance workers
Personal services
Personal care and service workers
Private event planners
Private event and portrait photographers
Private event videographers
Event officiants
Pet and show animal caretakers
Tutors
Nannies and babysitters
Visual artists
Floral designers
Personal appearance and wellness
Skincare specialists
Massage therapists
Barbers, hairdressers, hairstylists, and cosmetologists
Shampooers
Manicurists and pedicurists
Eyebrow and eyelash technicians
Makeup artists
Exercise trainers and group fitness instructors
Tattoo artists and piercers
Tailors
Shoe and leather workers and repairers
Recreation and instruction
Golf caddies
Self-enrichment teachers
Recreational and tour pilots
Tour guides
Travel guides
Sports and recreation instructors
Transportation and delivery
Parking and valet attendants
Taxi and rideshare drivers and chauffeurs
Shuttle drivers
Goods delivery people
Personal vehicle and equipment cleaners
Private and charter bus drivers
Water taxi operators and charter boat workers
Rickshaw, pedicab, and carriage drivers
Home movers
Gas pump attendant
The phase-out explained
The deduction shrinks once your modified adjusted gross income passes $150,000 ($300,000 married filing jointly). Schedule 1-A takes the amount over the threshold, divides it by $1,000, rounds down to a whole number and multiplies by $100. For example, a single filer with $162,500 of income is $12,500 over, which is 12 full thousands, so the deduction falls by $1,200: $20,000 of tips becomes a deduction of $18,800.
Tips and overtime together
Schedule 1-A adds the tips deduction (line 13) and the overtime deduction (line 21) together on line 38, so both can be claimed on the same return. They are separate deductions with separate caps. A single filer earning $70,000 with $9,000 of tips and $3,000 of overtime premium saves about $1,430 from the tips deduction alone, and about $1,790 from both together. Work out your overtime premium with the overtime tax deduction calculator.
How to claim it on Schedule 1-A
You claim the deduction on Schedule 1-A (Form 1040), Part II.
From 2026, employers report cash tips in Form W-2 box 12 with code TP, and the Treasury Tipped Occupation Code in box 14b.
If you are married, you must file jointly to claim the deduction. You (and your spouse, if the spouse received the tips) must have a valid Social Security number.
Self-employed workers qualify, but the deduction cannot exceed net income, before this deduction, from the trade or business where the tips were earned.
Employees can give their employer an updated Form W-4 so less federal income tax is withheld during the year.
No tax on tips examples
These use the same engine as the calculator, with the 2026 brackets and standard deduction.
No. Tips are still income. The No Tax on Tips rule is a deduction of up to $25,000 that lowers your federal income tax for 2025 through 2028. Tips generally remain subject to Social Security and Medicare taxes, and your state may tax them too.
How much of my tips are tax free?
Up to $25,000 of qualified tips a year, and the cap is the same for every filing status. Above $150,000 of modified adjusted gross income ($300,000 married filing jointly) the deduction falls by $100 for every full $1,000.
What counts as a qualified tip?
Qualified tips are voluntary cash or charged tips received from customers, including shared tips. They must be paid voluntarily by the customer and not be subject to negotiation; mandatory service charges are not tips unless the customer can change them.
Which jobs qualify for no tax on tips?
Only occupations on the IRS list of jobs that customarily and regularly received tips on or before December 31, 2024 — 71 occupations from bartenders and wait staff to rideshare drivers and gas pump attendants. The full list is on this page.
Can self-employed workers claim the tips deduction?
Yes, if the occupation is on the list. The deduction cannot exceed your net income from the business where you earned the tips, and self-employed people in a specified service trade or business are not eligible.
Can I claim no tax on tips and no tax on overtime together?
Yes. They are separate deductions with separate caps, and Schedule 1-A adds them together. In the example below, $9,000 of tips and $3,000 of overtime premium save about $1,790 together.
Can married couples filing separately claim it?
No. If you are married, you must file jointly to claim the deduction, and you need a valid Social Security number.
Will my paycheck change?
Not by itself. You claim the deduction on Schedule 1-A when you file. To have less federal income tax withheld during the year instead, give your employer an updated Form W-4.
The IRS pages read do not say how your state taxes tips. Most states set their own rules, so check your state.
