For millions of service workers across the US, tips form an essential part of their income. New guidance from federal tax authorities has now clarified that more than 70 occupations may qualify for a tax deduction tied to the government's 'No Tax on Tips' provision.
The US Department of the Treasury and the Internal Revenue Service released final regulations outlining which jobs are eligible for the deduction. The rule was introduced under legislation signed by President Donald Trump in July as part of the 'One Big Beautiful Bill Act' and it applies to tax years from 2025 through 2028. Despite its name, the policy does not remove taxes from tips entirely. Instead, it allows eligible workers to deduct certain tip income from their federal income tax.
