No Tax on Tips Calculator (2026)
You can deduct up to $25,000 of tips for 2026, and the limit is the same for married couples. It lowers federal income tax only. Gig workers can’t deduct more than their profit.
- Cap $25,000 per return
- Phase-out from $150k income
- 71 eligible jobs
Tips calculator
Private: runs in your browserEstimate of federal income tax only. Not tax advice.
How it works
Your job must be on the list
Servers, bartenders, drivers, hairstylists and 68 more jobs. Box 14b on your W-2 shows the code.
Add up your tips
W-2 tips (code TP) plus 1099 tips. 1099 tips can’t be more than your profit after expenses.
Capped at $25,000
Same cap for everyone, including married couples filing jointly.
Shrinks above $150,000
You lose $100 for every full $1,000 of income over $150,000 ($300,000 joint). Claim it on Schedule 1-A, Part II.
Examples
- Restaurant serverSingle, $38,000 wages including $18,000 code TPTax drops $2,380 → $390: save $1,990
- DoorDash driver$6,000 in tips, $4,500 profit after expensesDeduct $4,500
- Higher incomeSingle, $162,500 income, $30,000 tips$25,000 − $1,200 = $23,800
- Automatic 18% service chargeThe customer can’t remove or change itNot a tip: $0
Who qualifies
Counts
- Cash, card, check and app tips
- Tips customers chose to give
- W-2 employees and 1099 gig workers
Doesn’t count
- Forced service charges
- Jobs not on the IRS list (box 14b code 000)
- Married filing separately
Some special cases (like certain professional service businesses) have extra rules. We don’t judge those; check the Schedule 1-A instructions.
Keep a tip log
You can only deduct tips that are on a W-2 or 1099, or that you report on Form 4137. Write them down every day. App tips paid to your bank? Turn your bank statement PDF into a spreadsheet and add them up.
No tax on tips FAQ
Are tips tax-free in 2026?
Not fully. You can deduct up to $25,000 of tips from federal income tax for 2025–2028. Social Security, Medicare (or self-employment tax) and state tax still apply.
Does no tax on tips apply to DoorDash, Uber or Instacart?
Yes. Rideshare and delivery drivers are on the IRS list. But gig workers can’t deduct more tips than their profit after expenses.
Is my job on the list?
Check the IRS list of 71 tipped jobs. It includes servers, bartenders, hairstylists, tour guides and delivery drivers.
Do card and app tips count?
Yes. Cash, card, check and app tips all count, as long as the customer chose to give them.
Do automatic service charges count?
No, unless the customer can remove or change the charge.
What are code TP and box 14b on my W-2?
Code TP is the tips you reported to your employer. Box 14b is your job code. A 000 there means some tips came from a job that isn’t on the list.
Is the $25,000 limit doubled for married couples?
No. It’s $25,000 per return. The overtime limit is the one that doubles.
Can I claim both tips and overtime?
Yes, if you qualify for each. They have separate limits on Schedule 1-A.
What if I didn’t report my cash tips?
You can only deduct tips on a W-2 or 1099, or that you report yourself on Form 4137. Keep a daily tip log.
Is there an income limit?
Yes. You lose $100 for every full $1,000 of income over $150,000 ($300,000 joint).
Related tools and guides
- W-2 code TP and box 14bCash tips reported to your employer and your occupation code.
- IRS tipped occupations listAll 71 Treasury Tipped Occupation Codes, searchable.
- No tax on tips for gig drivers1099-K and 1099-NEC tips, the net-profit limit, and SE tax.
- No tax on overtime calculatorW-2 code TT or an hours estimate, cap, phase-out and tax saved.
- Schedule 1-A guidePart II (tips) and Part III (overtime), line by line.
- No tax on tips and overtimeBoth deductions side by side, with a combined calculator.