Treasury Releases Proposed List of Occupations for $25,000 Tips Deduction
- Viktoriya Barsukova, EA, MBA
- Sep 3
- 2 min read
On September 3, 2025, the U.S. Treasury Department released its proposed list of 68 occupations that may qualify for the new $25,000 tips deduction created under the One Big Beautiful Bill Act (OBBBA). If finalized, the deduction will apply for tax years 2025 through 2028.
The measure has been widely described as a “No Tax on Tips” law, but the reality is narrower. Tips remain taxable income and must be reported. What changes is that eligible taxpayers may deduct up to $25,000 of voluntary tips below the line, reducing adjusted gross income.
Who’s included?
Treasury grouped occupations into eight broad categories, ranging from:
Bartenders and wait staff
Hairstylists, barbers, and estheticians
Rideshare and delivery drivers
Musicians, performers, and event staff
Pet sitters and animal care providers
To qualify, both the occupation and the tips must meet Treasury’s definitions:
The job must appear on the official list.
Only voluntary tips count — mandatory service charges do not.
Key restrictions:
Income limits: Deduction phases out above $150,000 for single filers and $300,000 for joint filers.
Time-limited: Available only between 2025 and 2028.
Employer compliance: Employers must track and report tips on W-2s under new guidance.
Why it matters:
Supporters say this could provide meaningful relief for middle-income workers in tipped industries. Critics argue many tipped employees already owe little to no federal income tax, limiting the deduction’s reach. Others caution it may reinforce reliance on tipping culture instead of raising wages.
Treasury Releases Proposed List of Occupations for $25,000 Tips Deduction. The proposed list is now open for public comment and is expected to appear in the Federal Register by October 2, 2025.
The draft list is available directly from Treasury:
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