Tipped workers can deduct up to $25,000 from their taxable income under the “No Tax on Tips” provision of the One Big, Beautiful Bill Act (OBBBA), which President Trump signed into law on July 4, 2025. The temporary provision is in effect for 2025 through 2028. With just a week left in the 2025 filing season, the IRS has finalized regulations that explain what counts as “qualified tips” and, importantly, who can take advantage of the deduction.

Here’s what you need to know.

What are qualified tips?

Qualified tips are payments earned in a recognized tipped occupation, paid voluntarily by customers, and given in cash or its equivalent.

How does the IRS define a tipped occupation?

The bright line is December 31, 2024—your occupation must have “customarily and regularly” received tips before that date. As for the definition? It’s built on real-world tipping norms.

Those norms were based on a review of IRS data, legislative history, and survey data on tipped occupations. Treasury and IRS also checked the dictionary (yes, really) and other laws, including the Fair Labor Standards Act (FLSA), for guidance. And, of course, they looked at tax data, specifically 2023 Forms W-2, with an eye towards those that reported tips in box 7 (Social Security tips); Forms 4137 that reported tips on line 4; and corresponding income tax returns. That data was also compared to similar data for 2017-2022. The IRS also reviewed public comments.

(You can read more and find the previously released list here.)

Where did these comments come from?

A notice of proposed rulemaking and a notice of public hearing were published in the Federal Register on September 22, 2025, proposing regulations that identify occupations that customarily and regularly received tips on or before December 31, 2024, and that provide a definition of “qualified tips” for purposes of the income tax deduction for qualified tips under section 224. A public hearing was held on October 23, 2025, and comments were solicited. The comments are available for public inspection online or upon request.

What occupations made the final cut?

Some comments were incredibly specific, and the Regs took those into consideration. So, in response to the comments, the Regs confirm that pet groomers, digital content creators, dancers, boat workers, pool cleaners and yoga instructors remain on the final list.

The list had previously included some “illustrative examples” that some commenters felt weren’t inclusive enough. The Regs stress that the illustrative examples were provided to assist taxpayers, but they are not an exhaustive list of all occupations that fall under a Treasury Tipped Occupation Code (TTOC) category. The TTOC is a 3-digit classification system used to identify professions eligible for the deduction.

For example, under the TTOC for Travel Guides (705), cruise director and river expedition guide are listed as illustrative examples, but other travel guides, such as a hiking guide or urban ghost tour guide, would also be included in this TTOC, even though they are not listed as illustrative examples. That category also includes both indoor and outdoor locations.

In response to specific comments, the Regs also confirm that table game supervisor, doorman, eyelash technician, winery tasting room server, banquet wait staff, senior living and resident care service provider, and horse groomer are now included in the list. Also added to the list? People who dress as Santa Claus for parties, as well as those that impersonate other characters or celebrities—they’re covered by the “Entertainers and Performers” (TTOC 208) category. (Presumably, the real big........

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