Tip income only qualifies for the federal “no tax on tips” deduction if the job that earned it appears, by name, on a specific federal list — and that list just got longer than a lot of workers realize. Treasury and the IRS finalized the roster this spring at 71 occupations spread across eight industry categories, covering everything from bartenders and valets to golf caddies and floral designers. The deduction applies to tax years 2025 through 2028, so for anyone filing a return that claims it, whether a specific job title made that list decides whether a season’s worth of tip income is deductible, or none of it is.
Eight Categories, 71 Occupations, One Numbering System
The list runs on what the IRS calls Treasury Tipped Occupation Codes, a three-digit numbering system that sorts every qualifying job into one of eight categories: the 100s for beverage and food service, the 200s for entertainment and events, the 300s for hospitality and guest services, the 400s for home services, the 500s for personal services, the 600s for personal appearance and wellness, the 700s for recreation and instruction, and the 800s for transportation and delivery. Inside those eight groups sit occupations as specific as golf caddies, tattoo artists, home movers, pet groomers and water taxi operators, alongside the more familiar servers, bartenders and hotel bellhops.
The full, current version of the roster — the one that actually governs a return filed today — is published on the IRS’s occupations that customarily and regularly received tips page, cross-referenced to the codes used elsewhere in the tax system. A worker’s occupation has to sit inside one of those eight categories, under one of the listed codes, for the tips from that job to count as qualified tips at all; a job that sounds similar to one on the list but isn’t actually named on it doesn’t qualify just because it also involves tipping.
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The Final List Added Three Jobs the Proposal Left Off
The count of 71 is newer than a lot of what’s still circulating online. When Treasury and the IRS proposed the rule in September 2025, the draft list held 68 occupations. In final regulations the agencies issued in April 2026, after reviewing more than 300 public comments and holding an October 2025 public hearing, the list grew by three: visual artists and floral designers were added to the personal services category, and gas pump attendants were added to transportation and delivery. Anyone checking a job against an older article, an early summary of the proposal, or a screenshot saved from last fall is working from a list that’s three occupations short of the one that actually governs 2025 and later returns.
The $25,000 Cap and the Income Line That Shrinks It
Being on the list only gets a worker to the starting line. The deduction itself, laid out on the IRS’s Working Families Tax Cuts page, caps qualified tips at $25,000 a year for tax years 2025 through 2028, and it doesn’t hold flat at every income level. It phases out once modified adjusted gross income passes $150,000 for a single filer or $300,000 for a married couple filing jointly, so a high earner in an otherwise-qualifying occupation — a private chef, a sommelier, a top-tier stylist — can see the deduction shrink or disappear even though the job itself sits squarely on the list. For a self-employed worker, there’s a second ceiling: the deduction can’t exceed the net income the business actually earned from the tipped trade, calculated before the deduction is applied.
Doctors, Lawyers and Other Specified Trades Don’t Qualify, Even If They’re Tipped
The occupation list isn’t the only gate the deduction has to clear. Under the Section 199A rules that already exclude certain high-earning fields from other business tax breaks, self-employed workers in a “specified service trade or business” and employees of an employer classified as one don’t qualify for the tip deduction, no matter what their job title says. The IRS’s own guidance names health care and the performing arts specifically as fields where the exclusion applies. That produces genuinely odd edge cases: a massage therapist working through an independent day spa can potentially claim the deduction, while one doing identical work through a practice organized as a specified service trade or business cannot, because the exclusion runs through the employer’s business classification rather than the worker’s title or day-to-day duties alone.
It’s a Deduction Claimed at Filing, Not a Change to a Paycheck
Nothing about this list changes what shows up in a pay envelope during the year. The deduction is claimed on the return itself, not applied automatically at the register or by a payroll company, and Social Security and Medicare payroll taxes are still withheld on tip income exactly as before — the “no tax on tips” label describes income tax treatment only, not an exemption from FICA. To claim it, a worker needs those tips documented on a W-2, a 1099, another statement from the payor, or self-reported on Form 4137. The IRS’s guidance also requires employers and other payors to start reporting the recipient’s occupation, not just the tip amount, on the information returns they file, which is what ties a specific paycheck back to one of the 71 codes on the list when a return is checked against it.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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