The policy has drawn praise from some industry groups, like the National Restaurant Association, which frames it as beneficial for existing workers and a potential tool to attract more people to tipped positions. But critics argue that the policy benefits a narrow slice of the workforce and undermines broader support for workers to obtain benefits like health care. They also warn that the temporary deduction could be gamed if workers reclassify regular wages as tips.
How the ‘no tax on tips’ deduction works
The deduction only applies to federal income taxes so you may still have to pay state and local taxes. Social Security and Medicare taxes are still withheld from all tips.
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For every $1,000 your income exceeds those limits, the deduction is lowered by $100. And if you earn above $400,000 as an individual or above $550,000 as a joint filer, you can’t claim the deduction.
What jobs are included in the ‘no tax on tips’ exemption?
Treasury Secretary Scott Bessent told Axios that the list of jobs is “expansive, but fair.” The tipped tax-exempt jobs are grouped into eight categories covering multiple industries. The list includes multiple performance positions within entertainment jobs, which were disqualified under the ‘big beautiful bill.’
Here’s the full list of positions that qualify for the exemption.
1. Beverage & food service
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Bartenders
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Wait staff
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Food servers, non-restaurant
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Dining room and cafeteria attendants and bartender helpers
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Chefs and cooks
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Food preparation workers
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Fast food and counter workers
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Dishwashers
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Host staff, restaurant, lounge, and coffee shop
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Bakers
2. Entertainment & events
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Gambling dealers
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Gambling change persons and booth cashiers
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Gambling cage workers
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Gambling and sports book writers and runners
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Dancers
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Musicians and singers
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Disc jockeys (except radio)
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Entertainers & performers
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Digital content creators
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Ushers, lobby attendants, and ticket takers
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Locker room, coatroom and dressing room attendants
3. Hospitality & guest services
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Baggage porters and bellhops
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Concierges
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Hotel, motel and resort desk clerks
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Maids and housekeeping cleaners
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Home maintenance and repair workers
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Home landscaping and groundskeeping workers
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Home electricians
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Home plumbers
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Home heating/air conditioning mechanics and installers
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Home appliance installers and repairers
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Home cleaning service workers
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Locksmiths
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Roadside assistance workers
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Personal care and service workers
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Private event planners
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Private event and portrait photographers
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Private event videographers
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Event officiants
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Pet caretakers
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Tutors
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Nannies and babysitters
6. Personal appearance & wellness
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Skincare specialists
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Massage therapists
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Barbers, hairdressers, hairstylists, and cosmetologists
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Shampooers
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Manicurists and pedicurists
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Eyebrow threading and waxing technicians
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Makeup artists
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Exercise trainers and group fitness instructors
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Tattoo artists and piercers
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Tailors
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Shoe and leather workers and repairers
7. Recreation & instruction
8. Transportation & delivery
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Parking and valet attendants
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Taxi and rideshare drivers and chauffeurs
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Shuttle drivers
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Goods delivery people
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Personal vehicle and equipment cleaners
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Private and charter bus drivers
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Water taxi operators and charter boat workers
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Rickshaw, pedicab, and carriage drivers
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Home movers
The list will soon be published in the Federal Register, according to Axios.
(Photo by Brandon Bell/Getty Images News via Getty Images)
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