IRS Prepares to Finalize “No Tax on Tips” Occupations - Are You Eligible?

The Treasury Department has revealed a preliminary list of 68 occupations that could qualify for the groundbreaking "No Tax on Tips" deduction, part of the One Big Beautiful Bill Act. It’s a major leap forward, but the final list isn’t official yet. Here’s what we know and how to get ready.

What Workers Are on the Preliminary List?

Treasury’s leaked categories suggest a broad and inclusive approach. Occupations that typically receive tips, and may be eligible, include:

• Food & Beverage Service: bartenders, waitstaff, cooks, bakers, fast-food crew, dishwashers.

• Entertainment & Events: casino dealers, dancers, magicians, DJs, musicians, ushers, performers.

• Hospitality & Guest Services: bellhops, hotel clerks, concierges, maids.

• Personal Services: nannies, tutors, pet groomers, event photographers/planners.

• Personal Appearance & Wellness: hair stylists, barbers, makeup artists, trainers, tattoo artists.

• Recreation & Instruction: golf caddies, tour guides, instructors.

• Transportation & Delivery: taxi/rideshare drivers, valets, delivery workers, movers, boat operators.

• Digital Creators: influencers, podcasters, digital content creators.

  
  

  The official list is expected to be published by October 2, 2025 in the Federal Register.

What the Deduction Means - and Who Qualifies

• Eligible workers may deduct up to $25,000 in qualified tip income if filing singly (phase-out kicks in above $150,000 MAGI), and higher limits apply for joint filers.

• Tips must be voluntary, not automatic service charges, and properly recorded. Mandatory tips are excluded.

• Self-employed and 1099 workers may qualify if their income is from eligible tipped work - but some exclusions apply for certain service businesses.

  
  

How to Prepare Now (Even Before October 2)

1. Track Your Tips: Start keeping clear, dated records of tips going forward - especially if you work gigs, contracts, or cash-heavy jobs.

2. Consult Your Employer: Ask them to follow IRS guidance when reporting your occupation and tips on your W‑2 or 1099. Employers will need to use a “tipped occupation code” starting in 2026.

3. Stay Tuned for Official Details: OBBBA includes transition relief in 2025, but we expect more guidance soon on claiming the deduction responsibility.

   
   

Why This Matters for Kamish & Associates Clients

• If you work in an eligible occupation and meet income thresholds, the tip deduction could significantly reduce your federal tax.

• Accurate reporting this year positions you for a smooth filing next year.

• We’re closely watching for the Treasury’s official list so we can guide you precisely.

Bottom Line: The “No Tax on Tips” provision offers real relief, but eligibility hinges on final occupation lists and proper documentation. At Kamish & Associates, we’ll help