As we discussed here, on July 4, 2025, President Donald Trump signed the “One Big Beautiful Bill” Act (OBBBA) into law, which included a provision establishing a new temporary above-the-line tax deduction for “qualified tip income” through at least the 2028 tax year. When we previously discussed the deduction for qualified tip income, the IRS had not yet published its list of individuals who are eligible for the deduction—i.e., anyone who is “in an occupation which customarily and regularly receive[s] tips.”
We now have that guidance.
On September 2, 2025, the Treasury Department released a preliminary list of jobs eligible for the tax deduction on “qualified tip income” under the OBBBA. While the list is not yet final, as it must still be published in the Federal Register, the Treasury Department notes that the IRS expects the final list to “be substantially the same as this preliminary list.”
As reflected in the chart below, this apparently exhaustive preliminary list is arguably broader than the types of examples—albeit non-exhaustive— provided in the Fair Labor Standards Act (FLSA) regulations addressing for whom an employer may take a “tip credit” (i.e., “occupations such as those of waiters, bellhops, taxicab drivers, barbers, or beauty operators,” 29 C.F.R. § 531.57). Relatedly, unlike the U.S. Department of Labor’s (DOL) tip credit regulations, the Treasury Department’s guidance regarding what individuals may deduct tip income on their tax return lacks any eligibility threshold tied to the amount of tips the individual receives (e.g., per month or across the entire tax year). This means any individual in a qualifying occupation can likely take the deduction regardless of whether he is paid a base hourly cash wage below, at, or above the FLSA’s minimum hourly wage of $7.25.
The Treasury Department grouped the eligible positions into eight categories, identifying 82 jobs in total.
| Category | Jobs |
| Beverage & Food Service | Bartenders; Wait staff; Food servers (non-restaurant); Dining room & cafeteria attendants; Bartender helpers; Chefs & cooks; Food prep workers; Fast food & counter workers; Dishwashers; Hosts/hostesses; Bakers |
| Entertainment & Events | Gambling dealers; Gambling change persons; Booth cashiers; Gambling cage workers; Sportsbook writers & runners; Dancers; Musicians & singers; Disc jockeys (non-radio); Entertainers & performers; Digital content creators; Ushers; Lobby attendants; Ticket takers; Locker room, coatroom & dressing room attendants |
| Hospitality & Guest Services | Baggage porters; Bellhops; Concierges; Hotel/motel/resort desk clerks; Maids & housekeeping cleaners |
| Home Services | Home maintenance & repair workers; Landscapers & groundskeepers; Home electricians; Plumbers; HVAC installers & mechanics; Appliance installers & repairers; House cleaners; Locksmiths; Roadside assistance workers |
| Personal Services | Personal care workers; Event planners; Event/portrait photographers; Event videographers; Event officiants; Pet caretakers; Tutors; Nannies & babysitters |
| Personal Appearance & Wellness | Skincare specialists; Massage therapists; Barbers; Hairdressers; Hairstylists; Cosmetologists; Shampooers; Manicurists & pedicurists; Eyebrow threading & waxing techs; Makeup artists; Fitness trainers & group instructors; Tattoo artists; Piercers; Tailors; Shoe/leather workers & repairers |
| Recreation & Instruction | Golf caddies; Self-enrichment teachers; Recreational & tour pilots; Tour guides; Escorts; Travel guides; Sports & recreation instructors |
| Transportation & Delivery | Parking attendants; Valets; Taxi drivers; Rideshare drivers; Chauffeurs; Shuttle drivers; Delivery workers; Vehicle/equipment cleaners; Private & charter bus drivers; Water taxi operators; Charter boat workers; Rickshaw, pedicab & carriage drivers; Home movers |
Employers should be aware of the following:
- Payroll and Reporting: Businesses will need to track and report which portions of employee compensation are considered qualified tip income. Employers may need to update their systems to ensure accurate accounting.
- Employee Behavior: Workers may adjust how and when they report tips.
- Compliance and Education: Employers should educate themselves and their teams about these changes to answer questions and maintain compliance.
- Stay Informed: Further guidance from the IRS and Treasury Department is expected regarding implementation, reporting, and transition rules, particularly for the 2025 tax year.