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The policy has drawn praise from some industry groups, like the National Restaurant Association, which frames it as beneficial for existing workers and a potential tool to attract more people to tipped positions. But critics argue that the policy benefits a narrow slice of the workforce and undermines broader support for workers to obtain benefits like health care. They also warn that the temporary deduction could be gamed if workers reclassify regular wages as tips.
How the ‘no tax on tips’ deduction works
The deduction only applies to federal income taxes so you may still have to pay state and local taxes. Social Security and Medicare taxes are still withheld from all tips.
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For every $1,000 your income exceeds those limits, the deduction is lowered by $100. And if you earn above $400,000 as an individual or above $550,000 as a joint filer, you can’t claim the deduction.
What jobs are included in the ‘no tax on tips’ exemption?
Treasury Secretary Scott Bessent told Axios that the list of jobs is “expansive, but fair.” The tipped tax-exempt jobs are grouped into eight categories covering multiple industries. The list includes multiple performance positions within entertainment jobs, which were disqualified under the ‘big beautiful bill.’
Here’s the full list of positions that qualify for the exemption.
1. Beverage & food service
Bartenders
Wait staff
Food servers, non-restaurant
Dining room and cafeteria attendants and bartender helpers
Chefs and cooks
Food preparation workers
Fast food and counter workers
Dishwashers
Host staff, restaurant, lounge, and coffee shop
Bakers
2. Entertainment & events
Gambling dealers
Gambling change persons and booth cashiers
Gambling cage workers
Gambling and sports book writers and runners
Dancers
Musicians and singers
Disc jockeys (except radio)
Entertainers & performers
Digital content creators
Ushers, lobby attendants, and ticket takers
Locker room, coatroom and dressing room attendants
3. Hospitality & guest services
Baggage porters and bellhops
Concierges
Hotel, motel and resort desk clerks
Maids and housekeeping cleaners
Home maintenance and repair workers
Home landscaping and groundskeeping workers
Home electricians
Home plumbers
Home heating/air conditioning mechanics and installers
Home appliance installers and repairers
Home cleaning service workers
Locksmiths
Roadside assistance workers
Personal care and service workers
Private event planners
Private event and portrait photographers
Private event videographers
Event officiants
Pet caretakers
Tutors
Nannies and babysitters
6. Personal appearance & wellness
Skincare specialists
Massage therapists
Barbers, hairdressers, hairstylists, and cosmetologists
Shampooers
Manicurists and pedicurists
Eyebrow threading and waxing technicians
Makeup artists
Exercise trainers and group fitness instructors
Tattoo artists and piercers
Tailors
Shoe and leather workers and repairers
7. Recreation & instruction
8. Transportation & delivery
Parking and valet attendants
Taxi and rideshare drivers and chauffeurs
Shuttle drivers
Goods delivery people
Personal vehicle and equipment cleaners
Private and charter bus drivers
Water taxi operators and charter boat workers
Rickshaw, pedicab, and carriage drivers
Home movers
The list will soon be published in the Federal Register, according to Axios.
(Photo by Brandon Bell/Getty Images News via Getty Images)
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