UNLOCKING A NEW ERA OF OPPORTUNITY FOR AMERICA’S TIPPED WORKERS

THE PRESS CENTER | BREAKING NEWS | IRS

SEPT. 20 2025

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have released proposed regulations that bring powerful clarity, confidence, and momentum to the “no tax on tips” provision within the One, Big, Beautiful Bill. This guidance is designed to empower millions of hardworking Americans—people who show up every day with dedication, skill, and heart—to keep more of what they earn and step boldly into a future of greater financial freedom.

This is more than policy. It’s a promise: your effort matters, your service matters, and your tips belong to you.

A Clear Path Forward for Tipped Professionals

The proposed regulations outline nearly 70 specific occupations that customarily and consistently receive tips—from bartenders and baristas to tour guides, estheticians, water taxi operators, and many more. If your work involves serving, supporting, guiding, or elevating the experiences of others, chances are your profession is included.

To ensure every voice is heard, the Treasury and IRS are inviting public comments. Anyone wishing to contribute can submit feedback through Regulations.gov within the 30‑day comment window, ending October 23, 2025. Full instructions for participation are included directly in the proposed regulations.

This is your chance to shape the future of your industry. Your perspective matters. Your experience matters. Your voice matters.

Eight Empowering Categories of Tipped Occupations

Every listed occupation is assigned a three‑digit code within the Treasury Tipped Occupation Code, organized into eight clear, intuitive categories:

100s – Beverage and Food Service

200s – Entertainment and Events

300s – Hospitality and Guest Services

400s – Home Services

500s – Personal Services

600s – Personal Appearance and Wellness

700s – Recreation and Instruction

800s – Transportation and Delivery

These categories ensure that workers can easily identify where they fit and understand their eligibility with confidence.

What Counts as a Qualified Tip? Full Transparency, Zero Guesswork

To claim the deduction, workers must be employed in one of the listed occupations and receive qualified tips. The regulations clearly define what qualifies—removing confusion and empowering workers with certainty.

Qualified Tips Must Meet All of the Following:

1. Form of Payment

Tips must be paid in:

Cash

Checks

Credit or debit card transactions

Gift cards

Mobile payment apps (e.g., Venmo, Cash App, PayPal)

Note: Most digital assets (such as cryptocurrency) do not qualify.

2. Source of Tips

Tips must come:

Directly from customers

Through a legitimate tip‑sharing arrangement (such as a tip pool)

3. Voluntary Nature

Tips must be:

Freely given by the customer

Not negotiated, required, or automatically added

Mandatory service charges—like an automatic 18% gratuity—do not qualify.

4. Exclusions

Any amount connected to illegal activities—including prostitution or pornographic services—is not considered a qualified tip.

Source: IRS.gov