Tax Years 2025–2028 · OBBBA · IRC §224

No Tax on Tips Calculator — OBBBA IRC §224 Deduction (2025–2028)

A free, accurate calculator for the federal No Tax on Tips deduction under the One Big Beautiful Bill Act. Built for wait staff, bartenders, salon workers, drivers, and other tipped occupations.

● Up to $25,000 deductible ● 65+ qualifying jobs ● No signup required

Your details

Enter your tip info to estimate your federal tax savings.

MFJ = Married Filing Jointly · HOH = Head of Household · MFS = Married Filing Separately (not eligible).
The deduction is available for tax years 2025 through 2028 only.
Only IRS-approved tipped occupations qualify. The full list is at irs.gov/tippedoccupations.
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Total voluntary tips received during the tax year. Mandatory service charges and auto-gratuities don't qualify.
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Wages, salary, or other taxable income excluding the tip amount above.
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Leave blank to use total income above. Phase-out starts at $150K (single/HoH) or $300K (MFJ).

How the tips deduction works

The OBBBA created a federal income tax deduction for tip income earned in qualifying occupations during tax years 2025 through 2028.

1

$25,000 annual cap

Deduct up to $25,000 of qualified tips per tax return, regardless of filing status. Self-employed workers are also capped at their net business income from the tipped trade.

2

Qualified occupations only

You must work in one of roughly 65 IRS-approved tipped occupations — wait staff, bartenders, salon workers, drivers, personal trainers, and more. Tips from non-qualifying jobs don't count.

3

Phase-out at higher income

Reduces by $100 per $1,000 of MAGI above $150K (single/HoH) or $300K (MFJ). Fully eliminated at $400K (single) or $550K (MFJ).

Common questions

Quick answers to the most-asked questions about the No Tax on Tips deduction.

Who qualifies for the tips deduction?
W-2 employees and self-employed individuals working in IRS-approved tipped occupations — wait staff, bartenders, salon workers, delivery drivers, personal trainers, and roughly 65 other listed occupations. You must receive voluntary tips (not mandatory service charges). Married Filing Separately filers cannot claim it.
Does this reduce my Social Security and Medicare taxes?
No. FICA (Social Security 6.2% + Medicare 1.45% = 7.65%) still applies in full to all tip income. The deduction reduces federal income tax only. Self-employed workers continue to owe self-employment tax (15.3%) on tips.
Can I claim this AND the overtime deduction?
Yes. They are separate deductions under separate statutes (IRC §224 for tips, IRC §225 for overtime). If you qualify for both, claim both — each subject to its own cap. They share the same MAGI phase-out thresholds but compute separately. Use our Overtime Calculator to estimate the overtime side.
Do mandatory service charges or auto-gratuities qualify?
No. Only voluntary tips qualify. If your restaurant adds an automatic 18% gratuity for large parties, that amount is not a qualified tip even though it goes to the server. Charged tips on credit cards do qualify because they're still voluntary.
How do I claim it on my tax return?
On Form 1040, Schedule 1-A, Part II — the same form used for the overtime deduction. Schedule 1-A is new for tax year 2025. Major tax software supports it automatically.
What if my occupation isn't on the IRS list?
Your tips don't qualify for this federal deduction. The IRS published a "closed list" of qualifying occupations in final regulations under Reg. §1.224-1 — facts-and-circumstances arguments outside the list won't work. Check the official list at irs.gov/tippedoccupations.
Disclaimer. NoTaxOvertimeCalc.com is an independent informational resource and is not affiliated with the IRS or any government agency. The calculator above provides estimates only and does not constitute legal, tax, or financial advice. Tax laws change and individual circumstances vary — please consult a qualified tax professional before relying on any figure shown here. Last updated for tax year 2025 federal brackets and OBBBA P.L. 119-21 as enacted July 4, 2025.