No tax on tips: What occupations qualify? What are qualified tips?
ARTICLE | September 30, 2025
Authored by BT&Co.
The following article provides an in-depth review of the new proposed regulations under the “No tax on tips” provision of the One Big Beautiful Bill Act (OBBBA), revealed by the IRS on September 19, 2025. These regulations aim to provide clarity for employers and workers in tipped occupations by defining what constitutes as “qualified tips” and listing eligible occupations. For businesses, especially those in the service industries, these proposed regulations could signal upcoming changes in payroll reporting and tip tracking. The article dives deep into the implications, offering valuable insights for both employers and employees.
The article further elucidates on the background of the “No tax on tips” provision and how it was incorporated into the Internal Revenue Code. It also provides a detailed explanation of the terms used in the regulations, the occupations that may be eligible for tax relief, and the definition of qualified tips. This comprehensive analysis is beneficial for anyone needing a clear understanding of the proposed regulations and how they might affect their business or employment. To learn more about the IRS's proposed regulations on the “No tax on tips” provision, click the link below.
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