The Treasury Department and the IRS issued final regulations on Friday that list the occupations of tipped workers eligible for the “no tax on tips” provision introduced by last summer’s One Big Beautiful Bill Act.
Last September, proposed regulations on the new OBBBA tips deduction were issued, and the IRS received more than 300 comments, followed by a public hearing on Oct. 23, 2025. The final regulations describe the comments and how they’re addressed in the final regulations.
“Taxpayers are already benefiting from No Tax on Tips since the IRS already is issuing refunds to eligible workers,” IRS CEO Frank Bisignano said in a statement on April 10. “Given the wide variety of workers who receive tips, these final regulations help implement an important tax benefit for American workers.”
Under the tax-and-spending plan President Donald Trump signed into law on July 4, 2025, workers and self-employed individuals can deduct up to $25,000 they receive in qualified tips for any taxable year. The tips deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
The tips provision applies to taxable years beginning after Dec. 31, 2024, and before Jan. 1, 2029.
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Qualified tips are allowed to be deducted if they’re included on Form W-2, Wage and Tax Statement; Form 1099-NEC, Nonemployee Compensation; Form 1099-K, Payment Card and Third Party Network Transactions; Form 1099-MISC, Miscellaneous Information; or Form 4137, Social Security and Medicare Tax on Unreported Tip Income.
Definition of qualified tips
A worker can claim the deduction for qualified tips only if the person’s job is on the list of occupations that receive tips found in the final regulations. Qualified tips must satisfy the following requirements, according to the IRS:
- Qualified tips must be paid in cash or an equivalent medium, such as check, credit card, debit card, gift card, tangible, or intangible tokens that are readily exchangeable for a fixed amount in cash, or another form of electronic settlement or mobile payment application denominated in cash.
- Qualified tips must be received from customers or, in the case of an employee, through a mandatory or voluntary tip-sharing arrangement, such as a tip pool.
- Qualified tips must be paid voluntarily by the customer and not be subject to negotiation. Qualified tips don’t include service charges unless the customer has an option to disregard or modify the service charge. For instance, in the case of a restaurant that imposes an automatic 18% service charge for large parties and distributes that amount to waiters, bussers, and kitchen staff, if the charge is added with no option for the customer to disregard or modify it, the amounts distributed to the workers from this service charge aren’t qualified tips.
Gig workers and other self-employed individuals can qualify for the tips deduction if their job is on the final regulations’ list of occupations that receive tips and if the other statutory and regulatory requirements are met, the IRS says.
To claim the tips deduction, a taxpayer must include their Social Security number on the tax return.
List of occupations that receive tips
The final regulations list more than 70 separate occupations of tipped workers—from bartenders to water taxi operators.
The final regulations expand the list to include visual artists and floral designers in the “Personal Services” category and add gas pump attendants in the “Transportation and Delivery” category.
The final regulations clarify that the term “qualified tips” doesn’t include tips that were received while performing a service that is a felony or misdemeanor under applicable law. For example, tips received while performing services in human trafficking, exotic pet smuggling, counterfeiting or fencing stolen goods, drug trafficking, drug dealing, and unlicensed sales that violate the applicable law aren’t eligible for the deduction for qualified tips.
In addition, any amount received for prostitution services or pornographic activity isn’t a qualified tip, according to the final regulations.
The Treasury provided a three-digit code and descriptions for the occupations listed within the final regulations. As in the proposed regulations, the final regulations group the occupations into eight categories. Below are the eligible occupations for the tips deduction in each of the eight categories, as well as, in parenthesis, examples of job titles for a particular occupation:
100s: Beverage and Food Service
- 101: Bartenders (barkeep, mixologist, taproom attendant, sommelier)
- 102: Wait staff (cocktail waitress, dining car server, banquet staff)
- 103: Food servers — non-restaurant (room service food server, boat hop, beer cart server, winery tasting room server)
- 104: Dining room and cafeteria attendants and bartender helpers (bar back, bar helper, busser)
- 105: Chefs and cooks (executive chef, pastry chef, sous chef, fast-food cook, private chef, restaurant cook, saucier, food truck cook, banquet cook, caterer, chocolatier, confectioner)
- 106: Food preparation workers (salad maker, sandwich maker, fruit and vegetable parer, kitchen steward)
- 107: Fast food and counter workers (barista, ice cream server, cafeteria server)
- 108: Dishwashers (dish room worker, silverware cleaner)
- 109: Host staff — restaurant, lounge, and coffee shops (maître d’hôtel, dining room)
- 110: Bakers (bread baker, cake baker, bagel baker, pastry finisher)
200s: Entertainment and Events
- 201: Gambling dealers (blackjack dealer, craps dealer, poker dealer, roulette dealer, pit clerk, table game supervisor)
- 202: Gambling change persons and booth cashiers (slot attendant, mutuel teller)
- 203: Gambling cage workers (casino cashier, cage cashier)
- 204: Gambling and sports book writers and runners (betting runner, bingo worker, keno runner, race book writer)
- 205: Dancers (club dancer, dance artist)
- 206: Musicians and singers (instrumentalist, accompanist, lounge singer)
- 207: Disc jockeys — except radio (deejay, club DJ)
- 208: Entertainers and performers (comedian, clown, magician, street performer, Santa Claus/celebrity impersonators)
- 209: Digital content creators (streamer, online video creator, social media influencer, podcaster)
- 210: Ushers, lobby attendants, and ticket takers (ticket collector, theater usher)
- 211: Locker room, coatroom, and dressing room attendants (coat checker, washroom attendant, bathhouse attendant)
300s: Hospitality and Guest Services
- 301: Baggage porters and bellhops (hotel baggage handler, curbside airport check-in assistant, doorman)
- 302: Concierges (hotel guest service agent, activities concierge)
- 303: Hotel, motel, and resort desk clerks (front desk clerk, registration clerk)
- 304: Maids and housekeeping cleaners (hotel maid, housekeeping staff)
400s: Home Services
- 401: Home maintenance and repair workers (handyman, roofer, window repairer, house painter for interior/exterior, flooring installer, piano tuner, furniture restorer, antique repairer)
- 402: Home landscaping and groundskeeping workers (lawn mower, gardener, tree trimmer, weed sprayer)
- 403: Home electricians (electrician)
- 404: Home plumbers (plumber, pipefitter, steamfitter, sprinkler installer)
- 405: Home heating and air conditioning mechanics and installers (air conditioning repairer, heating system installer, chimney sweep)
- 406: Home appliance installers and repairers (washing machine installer, dishwasher repairer)
- 407: Home cleaning service workers (house cleaner, pool cleaner, carpet cleaner, window washer)
- 408: Locksmiths (safe installer, key maker)
- 409: Roadside assistance workers (tow truck driver, car battery technician, tire repairer, tire changer, car fuel deliverer)
500s: Personal Services
- 501: Personal care and service workers (elderly companion, personal care aide, butler, house sitter, personal valet)
- 502: Private event planners (wedding planner, party planner)
- 503: Private event and portrait photographers (wedding photographer, headshot photographer)
- 504: Private event videographers (wedding videographer)
- 505: Event officiants (wedding officiant, funeral celebrant, clergy, vow renewal officiant)
- 506: Pet and show animal caretakers (pet groomer, pet sitter, pet walker, kennel worker, pet trainer, horse groomer)
- 507: Tutors (reading tutor, math tutor, language tutor)
- 508: Nannies and babysitters (au pair, child sitter at hotels and gyms)
- 509: Visual artists (ice sculptor, caricature sketch artist)
- 510: Floral designers (corsage maker, florist, flower arranger, event florist)
600s: Personal Appearance and Wellness
- 601: Skincare specialists (facialist, electrologist, spa esthetician)
- 602: Massage therapists (masseuse, deep tissue massage therapist, sports message therapist)
- 603: Barbers, hairdressers, hairstylists, and cosmetologists (wig stylist, beautician, hair colorist, hair cutter)
- 604: Shampooers (scalp treatment specialist, shampoo assistant)
- 605: Manicurists and pedicurists (nail technician, fingernail sculptor, nail painter)
- 606: Eyebrow and eyelash technicians (eyebrow waxer)
- 607: Makeup artists (wedding makeup artist, party makeup artist)
- 608: Exercise trainers and group fitness instructors (aerobics trainer, yoga instructor, personal trainer)
- 609: Tattoo artists and piercers (tattoo artist, ear piercer, nose piercer)
- 610: Tailors (tailor, seamstress, clothing alterations worker)
- 611: Shoe and leather workers and repairers (cobbler, shoe shiner)
700s: Recreation and Instruction
- 701: Golf caddies (golf caddie, golf cart attendant)
- 702: Self-enrichment teachers (knitting instructor, piano teacher, art instructor, dance teacher)
- 703: Recreational and tour pilots (helicopter tour pilot, hot air balloon aeronaut, skydiving pilot)
- 704: Tour guides (museum guide, sightseeing guide)
- 705: Travel guides (cruise director, river expedition guide, hiking guide, urban ghost tour guide)
- 706: Sports and recreation instructors (diving instructor, ski instructor, tennis teacher, surfing instructor)
800s: Transportation and Delivery
- 801: Parking and valet attendants (parking garage attendant, valet parker)
- 802: Taxi and rideshare drivers and chauffeurs (cab driver, personal driver, platform/app-based rideshare driver)
- 803: Shuttle drivers (airport shuttle driver, hotel shuttle driver, rental car shuttle driver)
- 804: Goods delivery people (pizza delivery driver, grocery delivery driver, floral delivery, bicycle courier, package delivery person, appliance delivery driver, furniture delivery person, app/platform-based delivery person)
- 805: Personal vehicle and equipment cleaners (car wash attendant, auto detailer, boat waxer)
- 806: Private and charter bus drivers (motor coach bus driver, tour bus driver)
- 807: Water taxi operators and charter boat workers (water taxi captain, air boat operator, charter boat deckhand, charter boat steward)
- 808: Rickshaw, pedicab, and carriage drivers (horse drawn carriage driver, bike taxi driver)
- 809: Home movers (furniture mover, packer, piano mover, art mover)
- 810: Gas pump attendant (gas pumper)
“Employers may want to review the final rules and the list of occupations eligible for the ‘No Tax on Tips’ deduction. Employers and employees share responsibility for determining eligibility: ‘Taxpayers wishing to claim the deduction and entities responsible for information reporting [i.e., employers] are primarily responsible for ensuring their occupation is on the List of Occupations that Receive Tips,’” law firm Ogletree Deakins said in a blog post about the final regulations. “Further, employers may want to note that the deduction applies only for individual income tax purposes and does not adjust employers’ payroll tax withholding or remittances.”
Photo credit: SDI Productions/iStock
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