🍽️ IRS Notice 2025-72 · 68 Approved Occupations · IRC §224

Does Your Job Qualify for
No Tax on Tips?

The OBBBA created a federal deduction on tip income — but only for 68 IRS-approved occupations. Search your job title to check in seconds.

68Approved occupations
$25,000Max deduction
4M+Eligible tipped workers
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Step 1 — Check Your Occupation

Search or browse all 68 IRS TTOC-approved tipped occupations

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💵

Step 2 — Calculate Your Savings

For Tax Year 2025 (filing by April 15, 2026)

Your Information
$
$
📊 Your Estimated 2025 Savings
$0 Estimated Federal Tax Savings on Tips
Tips Deduction
$0
Marginal Tax Rate
—
📋 How to claim this: Report your tips deduction on Schedule 1-A (Form 1040). This is an above-the-line deduction — you do NOT need to itemize. Your tips must have been voluntarily given by customers — mandatory service charges do not qualify.
TurboTax handles both OBBBA deductions automatically.

Overtime AND tips — both calculated and filed correctly in their updated 2025 software.

File with TurboTax →
ALSO AVAILABLE

Do You Also Earn Overtime?

OBBBA also created a No Tax on Overtime deduction worth up to $12,500. You can stack both deductions if you qualify for both.

Use Overtime Calculator →
⚡ Key Rules
  • Must work in one of 68 IRS TTOC-approved occupations
  • Tips must be voluntary — service charges don't count
  • Works for both W-2 employees and self-employed
  • Deducts up to $25,000 of tip income
  • Phases out at $150K MAGI ($1 per $1 over)
  • Can be stacked with the overtime deduction
  • Source: IRS Notice 2025-72, IRC §224
📋 Occupations by Category
  • 🍽️ Food & Beverage Service20
  • 🏨 Hospitality & Lodging10
  • 💅 Personal Care12
  • 🚕 Transportation8
  • 🎰 Entertainment & Gaming8
  • 🏠 Home & Property Services5
  • 🔧 Skilled Trades3
  • ➕ Miscellaneous2

Tips Deduction — FAQ

Common questions about the No Tax on Tips deduction under OBBBA

What makes a tip "qualified" under OBBBA?

Tips must be (1) voluntarily given by a customer, (2) received in an occupation on the IRS TTOC list, and (3) reported as income on your return. Mandatory service charges, automatic gratuities added to bills, and employer-distributed tips may not qualify.

My job isn't on the list — can I still deduct tips?

No. If your occupation is not among the 68 occupations in IRS Notice 2025-72, your tips do not qualify for the deduction. You must still report all tip income as taxable wages on your return.

Can I stack the tips and overtime deductions?

Yes — if you qualify for both, you can claim both on the same return. The overtime deduction (max $12,500/$25,000) and the tips deduction (max $25,000) are calculated separately. Each has its own phase-out at $150,000 MAGI.

I'm self-employed and receive tips. Do I qualify?

Yes, unlike the overtime deduction, the No Tax on Tips deduction applies to both W-2 employees and self-employed workers (Schedule C filers), as long as your occupation is on the approved list. This covers freelance stylists, independent drivers, and similar workers.

Does this reduce Social Security and Medicare taxes?

No. The tips deduction only reduces your federal income tax. FICA taxes (6.2% Social Security + 1.45% Medicare) are still owed on tip income, as they have always been.

How long does this deduction last?

The No Tax on Tips deduction runs from tax year 2025 through 2028, identical to the overtime deduction. Both are part of the One Big Beautiful Bill Act (Public Law 119-21).