Treasury & IRS Guidance on Tipped Occupations (One, Big, Beautiful Bill)

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IRS In Audio

Internal Revenue Service

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3 days ago

Stay informed about the latest IRS news and updates in audio—without the hassle of digging through the website. IRS in Audio transforms official IRS announcements, policy changes, and tax-related guidance into easy-to-digest audio segments. Each episode provides accurate, timely audio information directly from the IRS, helping you stay compliant, save time, and avoid costly mistakes.

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Treasury & IRS Guidance on Tipped Occupations (One, Big, Beautiful Bill)

IRS In Audio

2 minutes 37 seconds

1 month ago

Treasury & IRS Guidance on Tipped Occupations (One, Big, Beautiful Bill)

Treasury & IRS Guidance on Tipped Occupations (One, Big, Beautiful Bill)

Context:

Guidance issued under the “no tax on tips” provision of the One, Big, Beautiful Bill.
Proposed regulations identify which occupations customarily receive tips and define what counts as qualified tips eligible for deduction.
Nearly 70 occupations are listed, ranging from bartenders to water taxi operators.

Occupation Categories (Treasury Tipped Occupation Codes):

100s – Food & Beverage Service
200s – Entertainment & Events
300s – Hospitality & Guest Services
400s – Home Services
500s – Personal Services
600s – Personal Appearance & Wellness
700s – Recreation & Instruction
800s – Transportation & Delivery

Definition of Qualified Tips:

Must be cash or cash-equivalent, e.g., check, card, gift card, electronic payment (excluding most digital assets).
Must be voluntary customer payments, or received via mandatory/voluntary tip pools.
Cannot be service charges automatically added to bills (e.g., a restaurant’s 18% charge for large parties).
Excludes illegal activity-related payments.

Public Input:

Comments due by Oct. 23, 2025, submitted via Regulations.gov.

Effective Impact:

Clarifies which workers can benefit from tip deductions.
Narrows definition of qualified tips to ensure compliance and prevent abuse.