No Tax on Tips Calculator
See how much the new federal tips deduction adds to your 2026 tax refund. Up to $25,000 of tips earned in 71 listed occupations is deductible; Social Security and Medicare still apply.
New for 2026 returns · Tax years 2025–2028
Are tips tax-free in 2026?
Not entirely. If your job is on the Treasury's list, you can deduct up to $25,000 of tips a year from your federal taxable income, phasing out above $150,000 of income ($300,000 joint). Tips are still taxed for Social Security and Medicare, and withheld on unless you claim the deduction on your W-4.
See what it adds to your refund
Added to your 2026 federal refund
+$2,366
from a $20,800 deduction: about 11¢ back on each deducted dollar
For $400 in tips a week · Wait staff · single
Estimate based on 2026 federal tax rules updated Oct 2026 How we calculate
Your details
Your tips
Cash and card tips customers chose to leave, including tip-pool shares.
Tips you report to your employer are part of your W-2 wages; from 2026 they also appear in box 12 with code TP.
Your return
The same deduction is worth more in a higher bracket.
More options Children, tax paid
Add your withholding (W-2 box 2) and any estimated payments to see your whole federal refund, not just what the deduction adds.
- Tips for the year
- $20,800
- Federal income tax without the deduction
- $2,956
- Federal income tax with it
- $590
- Social Security and Medicare on your tips (still owed)
- $1,591
- Whether a tip qualifies depends on how it was paid and reported.
- State income tax is not included.
Treasury Tipped Occupation Code 102: Wait staff. A 2026 W-2 shows it in box 14b, with your tips in box 12 under code TP. Rather have the deduction in each paycheck? Put your expected tips on line 1a of the 2026 Form W-4 Deductions Worksheet.
What counts
- Counts: voluntary cash and card tips, and tips shared through a tip pool, earned in a listed occupation and reported on your W-2, a 1099 or Form 4137: up to $25,000 per return.
- Doesn't count: mandatory service charges and automatic gratuities, tips you never reported, and tips earned in a job that isn't on the list.
- You need: a Social Security number valid for work, and a joint return if you're married.
How the no tax on tips deduction works
Tips are still income. What the 2025 tax law added is a federal deduction for qualified tips, claimed on Schedule 1-A when you file. These rules decide what it's worth.
- Your job has to be on the list: The Treasury publishes a closed list of 71 occupations that customarily received tips before 2025, each with a three-digit code. It's printed in full below.
- Up to $25,000 per return: Joint filers share the cap. Self-employed tips also can't exceed the business's net profit.
- It phases out above $150,000: $100 for every full $1,000 of modified AGI over $150,000 ($300,000 joint).
- It's worth your tax rate, not the deduction: $10,000 of tips is about $1,200 back at 12%. Many tipped workers owe little income tax to begin with, which is why the calculator prices the deduction on your whole return.
- Social Security and Medicare still apply: Tips stay subject to FICA, and to self-employment tax if you work for yourself.
Pick your job and enter your tips above to see what the deduction adds to your refund.
Frequently Asked Questions
Partly. For tax years 2025 through 2028 you can deduct up to $25,000 of qualified tips from your federal taxable income. The tips are still reported as income, and Social Security and Medicare still apply to them. Because it is a deduction, it saves you your own tax rate on the tips: about $1,200 on $10,000 of tips in the 12% bracket.
Only the 71 occupations on the Treasury's list, in eight groups: beverage and food service, entertainment and events, hospitality and guest services, home services, personal services, personal appearance and wellness, recreation and instruction, and transportation and delivery. Bartenders, wait staff, hairstylists, rideshare drivers, delivery people and hotel housekeepers are all on it. Tips earned in any other job don't qualify.
A cash or card tip the customer chose to leave and decided the amount of, including tips shared through a tip pool. Mandatory service charges and automatic gratuities don't count, and the tips must be reported: on your W-2, a 1099, or Form 4137 for tips you didn't report to your employer.
Per return. A married couple filing jointly shares one $25,000 limit even if both of them earn tips, and married couples have to file jointly to claim it at all.
The deduction loses $100 for every full $1,000 of modified AGI above $150,000, or $300,000 on a joint return. A full $25,000 claim is gone at $400,000 single or $550,000 joint.
No. Reported tips are still wages for Social Security and Medicare, at 7.65% for employees, and income tax is still withheld on them. The deduction only lowers your federal income tax.
Yes, if the work is in a listed occupation: up to the net profit of the business the tips came from. The law excludes tips earned in a "specified service" business, such as performing arts or health, but until final rules on that test are issued the IRS is treating every listed occupation as eligible (Notice 2025-69).
From tax year 2026, box 12 with code TP shows your cash tips, and box 14b shows your Treasury Tipped Occupation Code. On a 2025 W-2 there was no separate line, so the IRS lets you use box 7 (Social Security tips) or the tip reports you gave your employer.
Only if you file a new W-4. Enter your expected tips on line 1a of the 2026 Form W-4 Deductions Worksheet, available if your income is under $150,000 ($300,000 joint), and your employer withholds less. Otherwise the deduction comes back as part of your refund.
This is a federal deduction. Whether your state follows is up to the state: most start their income tax from federal adjusted gross income, which this deduction doesn't reduce, so check your state's rules.
It covers tax years 2025 through 2028. Unless Congress extends it, tips received in 2029 are fully taxable again.
Related Tools
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- Hourly Paycheck Calculator: Take-home pay from an hourly wage
- 1099 vs W-2 Take-Home Calculator: What self-employment tax does to tipped gig work
The 71 occupations that qualify
With each Treasury Tipped Occupation Code: the number a 2026 W-2 shows in box 14b. From the IRS list under the final regulations.
Beverage and food service
- 101Bartenders
- 102Wait staff
- 103Food or beverage servers, non-restaurant
- 104Dining room and cafeteria attendants and bartender helpers
- 105Chefs and cooks
- 106Food preparation workers
- 107Fast food and counter workers
- 108Dishwashers
- 109Host staff, restaurant, lounge, and coffee shop
- 110Bakers
Entertainment and events
- 201Gambling dealers
- 202Gambling change persons and booth cashiers
- 203Gambling cage workers
- 204Gambling and sports book writers and runners
- 205Dancers
- 206Musicians and singers
- 207Disc jockeys, except radio
- 208Entertainers and performers
- 209Digital content creators
- 210Ushers, lobby attendants, and ticket takers
- 211Locker room, coatroom, and dressing room attendants
Hospitality and guest services
- 301Baggage porters and bellhops
- 302Concierges
- 303Hotel, motel, and resort desk clerks
- 304Maids and housekeeping cleaners
Home services
- 401Home maintenance and repair workers
- 402Home landscaping and groundskeeping workers
- 403Home electricians
- 404Home plumbers
- 405Home heating and air conditioning mechanics and installers
- 406Home appliance installers and repairers
- 407Home cleaning service workers
- 408Locksmiths
- 409Roadside assistance workers
Personal services
- 501Personal care and service workers
- 502Private event planners
- 503Private event and portrait photographers
- 504Private event videographers
- 505Event officiants
- 506Pet and show animal caretakers
- 507Tutors
- 508Nannies and babysitters
- 509Visual artists
- 510Floral designers
Personal appearance and wellness
- 601Skincare specialists
- 602Massage therapists
- 603Barbers, hairdressers, hairstylists, and cosmetologists
- 604Shampooers
- 605Manicurists and pedicurists
- 606Eyebrow and eyelash technicians
- 607Makeup artists
- 608Exercise trainers and group fitness instructors
- 609Tattoo artists and piercers
- 610Tailors
- 611Shoe and leather workers and repairers
Recreation and instruction
- 701Golf caddies
- 702Self-enrichment teachers
- 703Recreational and tour pilots
- 704Tour guides
- 705Travel guides
- 706Sports and recreation instructors
Transportation and delivery
- 801Parking and valet attendants
- 802Taxi and rideshare drivers and chauffeurs
- 803Shuttle drivers
- 804Goods delivery people
- 805Personal vehicle and equipment cleaners
- 806Private and charter bus drivers
- 807Water taxi operators and charter boat workers
- 808Rickshaw, pedicab, and carriage drivers
- 809Home movers
- 810Gas pump attendant
Sources: Schedule 1-A (Form 1040), IRS Notice 2025-69, Treasury tipped occupations, 2026 Form W-4. Last checked October 2026.