No Tax on Tips and Overtime: 2026 Numbers
Every number behind the no tax on tips and overtime deductions, in one place, each with its IRS source. Also available as JSON and Markdown.
| Item | Value | Notes | Source |
|---|---|---|---|
| Tax years covered | 2025–2028 | Both deductions | IRS |
| Tips cap | $25,000 per return | Same for married filing jointly | IRS |
| Overtime cap | $12,500 | Single, head of household, surviving spouse | IRS |
| Overtime cap, joint | $25,000 | Married filing jointly, both spouses together | IRS |
| Qualifying overtime | 0.5 × regular rate | Only the FLSA-required premium, even for double time | IRS |
| Phase-out starts | $150,000 | Modified AGI; each deduction separately | IRS |
| Phase-out starts, joint | $300,000 | Married filing jointly | IRS |
| Phase-out rate | $100 per full $1,000 | Divide the excess by $1,000, round down | IRS |
| Overtime fully phased out (single, at cap) | $275,000 | Single filer with $12,500 of overtime | IRS |
| Tips fully phased out (single, at cap) | $400,000 | Single filer with $25,000 of tips | IRS |
| Married filing separately | Not allowed | Married couples must file jointly | IRS |
| W-2 code for overtime | Box 12, code TT | Required basis for the 2026 deduction | IRS |
| W-2 code for tips | Box 12, code TP + box 14b | Cash tips reported to employer; occupation code | IRS |
| Tipped occupations | 71 codes in 8 groups | Treasury Tipped Occupation Codes | IRS |
| Standard deduction 2026, single | $16,100 | Used for the tax-saved estimate | IRS |
| Standard deduction 2026, head of household | $24,150 | — | IRS |
| Standard deduction 2026, joint | $32,200 | — | IRS |
2026 federal tax brackets used for “tax saved”
From Rev. Proc. 2025-32. Rates apply to taxable income above each starting point.
| Rate | Single | Head of household | Married filing jointly |
|---|---|---|---|
| 10% | $0+ | $0+ | $0+ |
| 12% | $12,400+ | $17,700+ | $24,800+ |
| 22% | $50,400+ | $67,450+ | $100,800+ |
| 24% | $105,700+ | $105,700+ | $211,400+ |
| 32% | $201,775+ | $201,750+ | $403,550+ |
| 35% | $256,225+ | $256,200+ | $512,450+ |
| 37% | $640,600+ | $640,600+ | $768,700+ |
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Frequently asked questions
Where do these numbers come from?
Each row links to the IRS document it comes from: Schedule 1-A, the IRS overtime FAQ, the 2026 W-2 instructions and Rev. Proc. 2025-32.
Can I reuse this data?
Yes. The same figures are available as JSON at /data/no-tax-2026.json. Please link back to this page.
Related tools and guides
- No tax on tips and overtimeBoth deductions side by side, with a combined calculator.
- No tax on overtime calculatorW-2 code TT or an hours estimate, cap, phase-out and tax saved.
- No tax on tips calculatorW-2 code TP, box 14b and 1099 tips, with the net-profit limit.
- Schedule 1-A guidePart II (tips) and Part III (overtime), line by line.