No Tax on Tips Calculator (2026)
Estimate how much of your 2026 tip income is deductible — up to $25,000 — and the tax savings it produces.
Estimate your deduction
Results update instantlyFiling status
Cash and card tips in an occupation that customarily received tips before 2025.
Roughly your adjusted gross income — found on last year’s return or your paystub YTD.
Your 2026 tip deduction
$9,800
Estimated tax savings: $1,176 · taxed in the 12% bracket
| Qualified tips received | $9,800 |
| Statutory cap (single) | $25,000 |
| Phase-out reduction | −$0 |
| Your deduction | $9,800 |
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How the tip deduction works
Workers in occupations that customarily received tips before 2025 — servers, bartenders, hairdressers, drivers and more — can deduct up to $25,000 of qualified tip income for tax year 2026. Both cash and card tips count, as long as they’re reported.
The deduction is available whether you itemize or take the standard deduction. Tips are still subject to Social Security and Medicare payroll taxes — this deduction applies to federal income tax only.
Above $150,000 MAGI (single) or $300,000 (joint), the deduction shrinks by $100 for every $1,000 of excess income, reaching zero at $400,000 / $550,000.
Worked example
Andre is a server with $58,000 of wages and $9,800 of reported tips in 2026. His MAGI is under $150,000, so the full $9,800 is deductible — under the $25,000 cap. At a 12% marginal rate, that saves him about $1,176.
Who qualifies for the deduction
- You work in an occupation that customarily received tips before 2025
- Your tips are reported to your employer (or on Form 4137)
- You have a Social Security number valid for employment
- Your MAGI is under $150,000 (single) or $300,000 (joint) for the full amount
2026 phase-out thresholds
| Filing status | Full deduction if MAGI below | Phases out fully at |
|---|---|---|
| Single | $150,000 | $400,000 |
| Married filing jointly | $300,000 | $550,000 |
Above the threshold, the deduction drops $100 for every $1,000 of additional MAGI.
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Frequently asked questions
Which occupations qualify?
The IRS publishes a list of occupations that customarily received tips before 2025 — food service, hospitality, personal care, and similar roles. The Treasury list controls.
Do credit-card tips count?
Yes. Cash, credit-card, and electronic tips all qualify, provided they’re reported as tip income.
Are tips still subject to payroll tax?
Yes. The deduction reduces federal income tax only — Social Security and Medicare taxes still apply to tip income.
What if my tips exceed $25,000?
The deduction caps at $25,000 per return. Amounts above the cap are taxed normally.
How long does the tip deduction last?
Current law covers tax years 2025–2028, unless Congress extends it.