IRS: “No Tax on Tips” Occupations

The Internal Revenue Service (IRS) has unveiled proposed regulations listing 68 jobs that will qualify for the new “No Tax on Tips” deduction, which, effective 2025 through 2028, allows eligible employees and self-employed workers to deduct “qualified tips” received while working in “occupations that customarily and regularly receive tips” as specified by the IRS. Eligible tipped employees can claim a tax deduction up to $25,000 per year.

This is currently a proposed rule only, with a mandatory public comment period ending October 23, 2025. The IRS may revise the rule, and it will only take effect if published as a final rule in the Federal Register.

Employers may want to take note of the occupations listed in the proposed rule and assess whether they have employees who may qualify for the “No Tax on Tips” deduction.

Ogletree Deakins:
IRS Unveils List of Jobs Eligible for ‘No Tax on Tips’ Deduction