{"id":16467,"date":"2025-09-20T18:17:33","date_gmt":"2025-09-21T00:17:33","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/who-qualifies-for-no-tax-on-tips-and-what-counts-as-a-tip\/"},"modified":"2026-03-25T19:37:04","modified_gmt":"2026-03-25T19:37:04","slug":"who-qualifies-for-no-tax-on-tips-and-what-counts-as-a-tip","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/who-qualifies-for-no-tax-on-tips-and-what-counts-as-a-tip\/","title":{"rendered":"Who qualifies for \u2018no tax on tips\u2019 and what counts as a tip?"},"content":{"rendered":"

\"A
A waiter delivers food to patrons at a restaurant, Jan. 21, 2022, in Miami Beach, Florida. (The Associated Press)<\/span>Marta Lavandier<\/span><\/figcaption><\/figure>\n<\/p>\n

WASHINGTON \u2013 The Treasury Department is moving closer to making President Donald Trump\u2019s \u201cno tax on tips\u201d promise a reality. But new guidance released Friday narrows the number of tipped workers who will be able to claim the benefit.<\/p>\n

The agency on Friday submitted proposed regulations to the Federal Register that include greater detail on the occupations covered by the rule, who qualifies, and what counts as a \u201cqualified tip.\u201d<\/p>\n

The \u201cno tax on tips\u201d provision in Republicans\u2019 sweeping tax and spending law signed by Trump in July eliminates federal income taxes on tips for people working in jobs that have traditionally received them. It allows certain workers to deduct up to $25,000 in \u201cqualified tips\u201d per year from 2025 through 2028. The deduction phases out for taxpayers with a modified adjusted gross income over $150,000.<\/p>\n

To qualify as a tip, the tips must be earned in an occupation on Treasury\u2019s list of qualified occupations. Among the jobs exempted from tax on tips are sommeliers, cocktail waiters, pastry chefs, cake bakers, bingo workers, club dancers, DJs, clowns, podcasters, influencers, online video creators, ushers, maids, gardeners, electricians, house cleaners, tow truck drivers, wedding planners, personal care aides, tutors, au pairs, massage therapists, yoga instructors, skydiving pilots, ski instructors, parking garage attendants, delivery drivers and movers.<\/p>\n

The tip must be voluntarily given, so mandatory tips or auto-gratuities do not qualify for the \u201cno tax on tips\u201d benefit. However, tip pools and similar arrangements qualify if they are voluntary and reported to the IRS. The benefit is not available to married individuals who file their taxes separately.<\/p>\n

The tip must be given in cash, check, debit card, gift card or any item exchangeable for a fixed amount of cash, but not in digital assets. Any amount received for illegal activity, prostitution services or pornographic activity is not eligible as a tip, according to the Treasury Department.<\/p>\n

The \u201cno tax on tips\u201d provision will be implemented retroactively to Jan. 1, 2025.<\/p>\n

The Yale Budget Lab estimates that about 4 million workers held tipped jobs in 2023, representing approximately 2.5% of all jobs.<\/p>\n

Congressional budget analysts project the \u201cno tax on tips\u201d provision will add $40 billion to the deficit through 2028. The nonpartisan Joint Committee on Taxation estimated in June that the tips deduction will cost $32 billion over 10 years.<\/p>\n","protected":false},"excerpt":{"rendered":"

the new rules<\/p>\n","protected":false},"author":1,"featured_media":16468,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[28],"naviga_topic":[],"class_list":["post-16467","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-headlines"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/16467","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=16467"}],"version-history":[{"count":2,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/16467\/revisions"}],"predecessor-version":[{"id":20218,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/16467\/revisions\/20218"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/16468"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=16467"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=16467"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=16467"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=16467"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}