On September 2, the U.S. Department of Treasury published a preliminary list of 68 jobs that qualify for the “No Tax on Tips” deduction. The One Big Beautiful Bill Act (OBBBA) created a $25,000 deduction for tipped income. The deduction applies to single individuals with incomes up to $150,000 or married couples filing jointly with incomes up to $300,000.
The list is divided into eight industry categories. The release states, "Treasury and the IRS anticipate that the official proposed list will be substantially the same as this preliminary list."
The list is quite broad. Tax Foundation Senior Policy Analyst Alex Muresianu stated, "This is a much broader set of occupations than I think some were expecting. As such, the policy could end up being more expensive than previously anticipated." The "No Tax on Tips" provision is available from 2025 until 2028. The federal government estimated the cost would be $32 billion over the next decade.
There are eight principal categories for the occupations. A non-exhaustive list of jobs within each category is as follows:
- Beverage & Food Service — This section includes bartenders, wait staff, food service staff, chefs, cooks, fast food workers, dishwashers, restaurant and coffee shop workers and bakers.
- Entertainment & Events — This category includes dancers, individuals working in gambling establishments such as dealers or cashiers, musicians, singers, disc jockeys and other types of entertainment staff. It also includes ushers, ticket takers and staff who assist in performances.
- Hospitality & Guest Services — As expected, this section covers bellhops, concierge, hotel staff and housekeeping staff.
- Home Services — The home services category includes individuals who assist with any type of home maintenance, repair and landscaping, such as electricians, plumbers, installers, appliance repairers, cleaning service workers, locksmiths and roadside assistance helpers.
- Personal Services — This group includes personal care workers, private event planners, photographers and videographers, pet caretakers, tutors, nannies and babysitters.
- Personal Appearance & Wellness — This category includes skin care specialists, barbers, hairstylists, cosmetologists, manicurists, eyebrow and waxing technicians, makeup artists, exercise trainers, tattoo artists, tailors and shoe and leather workers.
- Recreation & Instruction — This category includes golf caddies, recreation instructors, tour pilots and guides, travel guides and sports instructors.
- Transportation & Delivery — This group includes taxis drivers, workers on charter boats, rickshaw or carriage drivers and movers.
