US Treasury Proposes Broad 'No Tax on Tips' Deduction Covering 70 Occupations

The Trump administration's "no tax on tips" initiative, part of the One, Big, Beautiful Bill signed into law in 2025, allows eligible workers to deduct up to $25,000 in qualified tips annually from 2025 through 2028, phasing out for higher earners. The Treasury and IRS have provided guidance on which occupations qualify, including bartenders, waiters, cab drivers, plumbers, podcasters, streamers, and social media influencers, while excluding professions such as actors, singers, musicians, and entertainers like pornographic content creators and those involved in illegal activities. Tips must be voluntarily given and received in cash, check, debit card, or gift card forms, with mandatory tips or auto-gratuities excluded from the benefit. The initiative aims to support roughly 4 million American workers in tipped occupations, although some jobs like professional entertainers and certain health and financial services roles are not covered under current rules. The IRS is seeking public comments on the proposed regulations through October 23, with a public hearing scheduled, as they finalize the specifics of the policy. This tax break does not affect payroll taxes on tipped income, and married individuals filing separately are ineligible for the deduction.