President Trump's "No Tax on Tips" Policy: An Overview of Eligible Jobs

As of Labor Day 2025, the U.S. Treasury Department has begun outlining the jobs eligible for President Donald Trump's "No Tax on Tips" policy, part of the "One Big Beautiful Bill" passed by Congress earlier this year. This policy aims to exempt certain professions from federal income taxes on tips, allowing workers to deduct up to $25,000 in tips from their taxable income. The initiative is designed to benefit approximately 4 million Americans employed in industries where tipping is customary, representing about 2.5% of the U.S. workforce.

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The Treasury Department has categorized the eligible jobs into eight distinct sectors:

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1. Beverage & Food Service: Includes bartenders, wait staff, food servers, chefs, and dishwashers.

First look at workers whose tips will be ‘tax exempt’: Treasury Dept List

2. Entertainment & Events: Covers gambling dealers, entertainers, and ticket takers.

First look at workers whose tips will be ‘tax exempt’: Treasury Dept List

3. Hospitality & Guest Services: Encompasses concierges, bellhops, and housekeeping staff.

First look at workers whose tips will be ‘tax exempt’: Treasury Dept List

4. Home Services: Features maintenance workers, cleaners, and plumbers.

First look at workers whose tips will be ‘tax exempt’: Treasury Dept List

5. Personal Services: Includes personal care workers, event planners, and tutors.

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6. Personal Appearance & Wellness: Comprises hairdressers, massage therapists, and tattoo artists.

First look at workers whose tips will be ‘tax exempt’: Treasury Dept List

7. Recreation & Instruction: Involves golf caddies, tour guides, and sports instructors.

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8. Transportation & Delivery: Covers taxi drivers, delivery workers, and home movers.

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The "No Tax on Tips" policy allows eligible workers to deduct tips without needing to itemize deductions, directly reducing their taxable federal income. However, the policy is temporary, set to expire in 2028, and will require future Congressional action for extension. Additionally, while the first $25,000 in tips is exempt from federal income tax, state and local taxes still apply.

No Tax on Tips

Critics argue that the policy may not significantly benefit lower-wage workers, as many already fall below the taxable income threshold due to the standard deduction. Furthermore, there are concerns that the policy could incentivize employers to reduce base wages, potentially undermining the financial stability of tipped workers. The National Restaurant Association, which lobbied for this provision, primarily represents business owners rather than employees, raising questions about the true beneficiaries of the policy.

No Tax on Tips

Treasury Secretary Scott Bessent described the deduction as "expansive but fair," emphasizing its potential impact on workers who rely on tips. The Treasury Department plans to publish the full list of eligible jobs in the Federal Register, along with proposed regulations.

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The Treasury Department is expected to finalize the list of eligible occupations and provide further details on the implementation of the policy in September 2025. The effectiveness and impact of the "No Tax on Tips" policy will be closely monitored as it unfolds over the next few years.

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• “For workers, $20 here and $20 there can make a big difference.” — Scott Bessent, Treasury Secretary

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