Archive · 23 Nov 2025
US Tax Relief: IRS Expands 'No Tax on Tips' to More Workers
The IRS has changed a rule so that more workers, including those in professions like law, accounting, and consulting, can get a tax break on the tips they receive.
This means they won't have to pay taxes on up to $25,000 of their tips from 2025 to 2028.
This change is part of a law that President Trump signed in 2024.
IRS relaxes 'No Tax on Tips' rule to include more professions
Up to $25,000 of qualified tips can be excluded from taxable income (2025-2028)
Benefits expanded to 'specified service trade or business' employees
Maximum overtime deduction on tips: $12,500 (individual), $25,000 (joint)
Deduction phases out for high-income earners and available to non-itemizers
- Who
- Millions of tipped workers, including those in 'specified service trade or business'
- What
- Benefit from the 'No Tax on Tips' provision
- When
- From 2025 to 2028
- Where
- United States
- Why
- To provide tax relief for tipped workers
- Tipped Workers Affected
- 6 million