IRS Lists Occupations with Tip Tax Exemption Under One Big Beautiful Bill Act

(UNITED STATES) — The Internal Revenue Service and the Treasury Department issued final regulations on April 10, 2026 that set the rules for the federal “No Tax on Tips” deduction and published a list of 71 qualifying occupations under T.D. 10044.

The measure, enacted through the One Big Beautiful Bill Act signed on July 4, 2025, lets eligible workers deduct up to $25,000 in tip income from federal income taxes each year. The deduction applies to tax years 2025 through 2028.

IRS CEO Frank J. Bisignano said the agency had already begun paying refunds tied to the break. “Taxpayers are already benefiting from No Tax on Tips since the IRS already is issuing refunds to eligible workers. Given the wide variety of workers who receive tips, these final regulations help implement an important tax benefit for American workers.”

Treasury and the IRS organized the eligible jobs under Treasury Tipped Occupation Codes, or TTOC, a framework that sorts qualifying work into eight major categories. Those categories cover beverage and food service, entertainment and events, hospitality and guest services, home services, personal services, personal appearance and wellness, recreation and instruction, and transportation and delivery.

Workers on the list include bartenders, wait staff, non-restaurant food servers, chefs and cooks, fast food and counter workers, dishwashers, gambling dealers, dancers, musicians and singers, digital content creators, ushers, concierges, hotel maids, baggage porters and bellhops, home maintenance and repair workers, landscapers, home cleaners, barbers, hairdressers, massage therapists, golf caddies, travel guides, sports and recreation instructors, taxi and rideshare drivers, shuttle drivers, and goods delivery people.

The final rule also added several occupations that were not in earlier drafts, including Visual Artists (509), Floral Designers (510), and Gas Pump Attendants (810). Treasury Secretary Scott Bessent said on September 2, 2025 that the list of qualifying jobs is “expansive, but fair,” intended to capture traditional tipped roles.

Under the rule, a qualified tip must be a cash tip paid voluntarily by a customer. Treasury and the IRS said that definition includes cash, credit card payments, and digital payments made through services such as Venmo or Zelle.

Several common payments do not count. Automatic gratuities, service charges, and mandatory tips fall outside the deduction, and so do tips earned in Specified Service Trades or Businesses, or SSTBs, including law and medicine.

The tax break begins to phase out once modified adjusted gross income rises above $150,000 for individual filers or $300,000 for joint filers. The maximum deduction remains capped at $25,000 in a taxable year.

White House spokeswoman Liz Huston tied the rule to a broader package of tax changes championed by President Trump. “Thanks to President Trump signing the largest middle-class tax cuts in history including no tax on tips, no tax on overtime, and no tax on Social Security Americans are keeping more of their hard-earned money.”

The administration estimates that about 6 million tipped workers will qualify, and the White House has put average annual tax savings at roughly $1,300 per worker. Those figures place the No Tax on Tips provision among the more visible consumer-facing parts of the One Big Beautiful Bill Act, which also created the separate “No Tax on Overtime” provision.

Employers face new reporting duties starting in 2026. They must report qualified tips separately in Box 12 (Code TP) and include the worker’s TTOC code in Box 14b on the Form W-2.

The rule carries direct limits for immigrants and other non-citizens. A worker must have a valid Social Security Number to claim the deduction, while people who file taxes with an Individual Taxpayer Identification Number are ineligible for both No Tax on Tips and No Tax on Overtime.

That restriction matters in industries where tipped labor includes workers with mixed immigration statuses and mixed tax filing histories. A worker may perform a qualifying occupation under the TTOC system and still miss the deduction because of the Social Security Number requirement.

The tax rule also arrives alongside a harder enforcement backdrop. USCIS issued Policy Memorandum PM-602-0194 on January 1, 2026, placing an adjudication hold on benefits for certain foreign nationals, and an IRS data-sharing agreement with DHS and ICE signed in April 2025 allows cross-verification of tax records to identify undocumented workers.

That agreement is facing federal litigation, but its existence places tax reporting and immigration status in the same administrative frame for some workers. In practice, the deduction offers a tax benefit to eligible tipped employees while leaving others outside the program based on filing status and identification requirements.

Treasury’s occupation code system appears designed to limit disputes over which jobs count as customarily and regularly tipped work. Instead of using broad industry labels alone, the government tied eligibility to listed roles and numerical codes, an approach that gives employers and payroll departments a defined framework for reporting and gives workers a clearer way to match their job to the deduction rules.

Some roles on the list sit in sectors that have not always been treated as standard tipping jobs in federal tax debates, including digital content creators, visual artists, and floral designers. Their inclusion in T.D. 10044 shows Treasury interpreted “customarily and regularly received tips” broadly across in-person services, guest-facing work, entertainment, and certain creative occupations, while still excluding fields classified as SSTBs.

Restaurant and hospitality jobs still make up a large share of the list. Bartenders, wait staff, hotel maids, concierges, baggage porters, and bellhops fit squarely within the traditional tip economy that lawmakers pointed to when the No Tax on Tips proposal gained political traction in 2025.

The regulations also settle a practical question that followed passage of the law: what counts as a “tip” in an economy where customers pay by phone and tablet instead of cash. Treasury and the IRS answered that by treating voluntary digital payments through credit cards, Venmo, and Zelle the same way as cash tips, provided the payment is voluntary and paid by the customer.

Workers who receive mandatory charges bundled into a bill do not get the same treatment. The distinction separates a diner’s voluntary payment to a server from a preset charge added by a business, and it separates customer discretion from employer-imposed fees.

The government published the regulations after months of anticipation from service industries and payroll providers that had awaited the occupation list and reporting codes. Without that list, employers had little guidance on how to identify eligible workers or prepare wage statements that match the new deduction.

The IRS placed the announcement in Press Release IR-2026-49, available [here](https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-no-tax-on-tips). The final rule also appeared in the Federal Register on April 13, 2026, and the agency has pointed taxpayers to IRS Publication 519 (2025), the U.S. Tax Guide for Aliens, for related rules affecting non-citizen filers.

With filing season already underway for workers seeking refunds tied to the deduction, the release of T.D. 10044 gives the clearest federal definition yet of who qualifies for No Tax on Tips, who does not, and how employers must document both beginning this year.