The U.S. Department of the Treasury has released a preliminary list of occupations that customarily and regularly receive tips for purposes of the new “no tax on tips” provision under H.R. 1, P.L. 119-21, commonly known as the One Big Beautiful Bill Act (OBBBA).
This provision, effective for tax years 2025 through 2028, allows workers in certain qualified occupations to claim a deduction of up to $25,000 for eligible tips. To qualify, tips must be received in an occupation that customarily and regularly received tips on or before December 31, 2024. Importantly, the law excludes tips received in the course of certain trades and businesses—including health, performing arts, and athletics.
Preliminary List of Occupations
Treasury’s list spans several industries, including:
- Beverage & Food Service (bartenders, wait staff, cooks, hosts, etc.)
- Entertainment & Events (dealers, dancers, musicians, digital content creators, ushers, etc.)
- Hospitality & Guest Services (baggage porters, concierges, hotel clerks, housekeepers, etc.)
- Home Services (maintenance, landscaping, plumbers, HVAC, appliance repair, cleaning services, locksmiths, roadside assistance, etc.)
- Personal Services (personal care workers, event planners, photographers, videographers, etc.)
The official proposed list will be issued as part of forthcoming regulations. Treasury and the IRS anticipate the final version will be substantially the same as the preliminary list.
For more details, you can access Treasury’s official posting here: Treasury Preliminary List of Tipped Occupations (PDF).
Workers in eligible occupations should be prepared to track and substantiate their tip income carefully beginning in 2025, as this provision offers a significant opportunity to reduce taxable income. Employers in these industries may also need to review payroll and reporting processes to ensure compliance and maximize employee benefits under this new rule.
We will continue to monitor Treasury and IRS guidance as the proposed regulations are released and provide further updates.