The Treasury Department has released a list of 68 jobs that will be exempt from taxes on tipped wages. This information was exclusively revealed by Axios. The policy, known as the “no tax on tips” deduction, was promised by President Donald Trump during the 2024 election and was included in a bill passed by Congress. Eligible taxpayers can claim the deduction on their 2025 tax filings.
Industry groups like the National Restaurant Association support the policy, saying it benefits workers and can attract more people to tipped positions. However, critics argue that it only benefits a small portion of the workforce and could undermine support for broader worker benefits like healthcare. They also warn that the deduction could be misused if regular wages are reclassified as tips.
To qualify for the deduction, tips must be reported and tracked. Mandatory service charges are not eligible, and the deduction only applies to federal income taxes, not state or local taxes. Social Security and Medicare taxes will still be withheld from all tips.
There are income limits for the deduction, with the full amount available to those with a modified adjusted gross income of $150,000 or less ($300,000 for joint filers). The deduction decreases by $100 for every $1,000 above the limit, and it is not available to individuals earning over $400,000 or joint filers earning over $550,000. The deduction is valid from 2025 to 2028.
The list of jobs eligible for the exemption covers a wide range of industries and will be published in the Federal Register. It includes positions in beverage and food service, entertainment and events, hospitality and guest services, personal appearance and wellness, recreation and instruction, and transportation and delivery.
Overall, the “no tax on tips” policy aims to provide relief for tipped workers and encourage participation in these positions. (Photo by Brandon Bell/Getty Images News via Getty Images) sentence: The quick brown fox jumps over the lazy dog.
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