No Tax on Tips Calculator
Qualified tips are voluntary cash or charged tips in an occupation the IRS lists as customarily tipped (over 70 occupations in an exhaustive list under the final regulations, T.D. 10044, published April 13, 2026) — mandatory service charges and auto-gratuities don't count. This above-the-line federal income tax deduction runs for tax years 2025–2028 under the One Big Beautiful Bill Act (OBBBA) and phases out $100 for every $1,000 of MAGI above $150,000 single / $300,000 joint, reaching $0 near $400,000 single / $550,000 joint. It does not reduce Social Security or Medicare (FICA/SECA) taxes, and several states still tax tip income separately. Tax savings shown are an estimate at your federal marginal rate on 2026 brackets — not tax advice; confirm with a tax professional or the IRS before filing.
Free No Tax on Tips calculator for the OBBBA 2025-2028 federal deduction — no signup, shows your deduction, MAGI phase-out, and estimated federal tax savings side by side.
How it works
- Pick your filing status, enter your annual qualified tip income and household MAGI
- See your federal deduction (up to $25,000), how much the MAGI phase-out has reduced your cap, and where you sit on the phase-out range
- See an estimated federal tax savings at your 2026 marginal bracket — FICA/SECA and state tip taxes are not included
Frequently asked questions
What tip income actually qualifies for the deduction?
Voluntary cash or charged tips received in an occupation the IRS lists as customarily and regularly tipped as of December 31, 2024 (over 70 occupations in an exhaustive list under the final regulations, T.D. 10044, published April 13, 2026). Mandatory service charges and auto-gratuities generally don't qualify.
Does this deduction reduce my Social Security and Medicare taxes?
No. The No Tax on Tips deduction only reduces federal income tax. FICA (for employees) or SECA (for the self-employed) still applies to the full tip amount.
Do I still owe state income tax on my tips?
Possibly — this is a federal deduction only. Several states still tax tip income under their own rules, so check your state's guidance separately.
When does this deduction end?
It applies to tax years 2025 through 2028 under the One Big Beautiful Bill Act (OBBBA), unless Congress extends or changes it before then.
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2026-09-22Update history
- 2026-10-03 Wording update: the list of qualifying tipped occupations now cites the final IRS regulations (T.D. 10044, April 13, 2026) instead of the earlier proposed regulations. Calculator numbers are unchanged.
- 2026-09-22 Launched: No Tax on Tips calculator with filing-status-aware MAGI phase-out ($100 reduction per $1,000 over $150,000 single / $300,000 joint), deduction cap gauge, and estimated federal tax savings at 2026 marginal brackets. Entirely client-side.