Your occupation decides this, not your tips
The deduction under section 224 reaches only the occupations Treasury listed. A hotel night auditor who receives tips every week cannot deduct them, because the listed hospitality codes stop at desk clerks, porters, concierges and housekeepers. Treasury built the list from occupations that customarily and regularly received tips on or before December 31, 2024, which also shuts out any job that started collecting tips after that date.
Three occupations joined in the final rule that the preliminary list had left out: visual artists at 509, floral designers at 510 and gas pump attendants at 810. If you checked an earlier version of this list in 2025 and found nothing, check again.
Which tips count
Qualified tips are amounts a customer decides to leave, paid in cash, by card, through an app or shared out under a valid tip pool. The following do not qualify:
- Mandatory service charges, including the automatic 18% or 20% added to large parties.
- Automatic gratuities on room service or banquet contracts.
- Tips paid in digital assets.
- Tips from a business in a specified service trade such as health, law, accounting or consulting, which the statute excludes.
The distinction turns on whether the customer could have paid nothing. A line on the bill the customer cannot remove is a service charge, and it stays fully taxable.
Box 14b, and what to do if your employer leaves it blank
Employers report qualified tips and your TTOC in box 14b of the 2026 Form W-2. The IRS allowed transition relief for 2025, so many W-2s for that year carry no code and no separate tip figure. You can still claim the deduction for 2025 by working the figure out from your own records, your pay stubs and your daily tip log.
Ask your payroll department for the code if box 14b is empty for 2026. An employer who uses the wrong code can hand you a mismatch notice from the IRS, so it is worth checking against the table above before you file.
What the deduction is worth
The cap is $25,000 of qualified tips per return for tax years 2025 through 2028, and the deduction sits above the line, so you claim it alongside the standard deduction. It shrinks by $100 for every $1,000 of modified adjusted gross income above $150,000 filing single or $300,000 filing jointly, which empties it at $400,000 and $550,000.
A server with $18,000 of tips in the 22% bracket saves about $3,960 in federal income tax. FICA still applies to the full $18,000, your employer still withholds it, and most states still tax the whole amount. The no tax on tips calculator runs your own figures and shows which states follow the federal treatment.
Frequently asked questions
Do DoorDash and Uber Eats drivers qualify?
Yes, under code 804, Goods Delivery People. Rideshare driving sits at 802. Self-employed claimants cannot deduct more than the net income of the business the tips came from.
Do content creators qualify?
Code 209 covers digital content creators, so voluntary tips, donations and subscriptions that viewers choose to send can qualify. A fixed paid-subscription fee is a price rather than a tip.
Do nail technicians and estheticians qualify?
Yes. Manicurists and pedicurists sit at 605 and skincare specialists at 601.
Do I need a Social Security number?
Yes. The statute requires a valid SSN, so ITIN filers cannot claim the deduction. Married filers must file jointly to claim it.
Does this cut my Social Security benefit later?
No. FICA still applies to your tips, so your earnings record and your future benefit are unaffected.
Which form do I file?
Schedule 1-A, the new form that carries all four OBBBA deductions. The Schedule 1-A calculator fills in every part.