No Tax on Tips for Servers and Waitstaff (2026)
Yes. Servers and Waitstaff are on the IRS tipped jobs list (code 102), so you can deduct up to $25,000 of tips from federal income tax for 2026. Most servers can now deduct the tips on their W-2 from federal income tax.
- IRS code 102
- Cap $25,000
- Reported on W-2 (TP)
Tips calculator for servers and waitstaff
Private: runs in your browserEstimate of federal income tax only. Not tax advice.
Example: server
- Single server, $38,000 wages including $18,000 code TPQualified tips $18,000.Deduct $18,000 · save about $1,990 in federal tax
What servers should know
- Your tips should be on your 2026 W-2 in box 12, code TP, with your job code in box 14b.
- Keep reporting cash tips to your employer each month (Form 4070 or your POS). Unreported tips can’t be deducted unless you file Form 4137.
- A mandatory 18–20% charge on large parties is a service charge, not a tip, if the guest can’t change it.
- Tips from banquets or catering may use a different code (103, non-restaurant servers). Both are on the list.
Your IRS code
102 Wait staff. Not your exact job? See the full list of 71 tipped jobs.
Servers and Waitstaff: FAQ
Do servers get no tax on tips?
Yes. Wait staff are code 102 on the IRS list. You can deduct up to $25,000 of reported tips for 2025–2028.
Are credit card tips included?
Yes. Card tips count the same as cash, as long as the customer chose to leave them.
Will I still pay Social Security on tips?
Yes. The deduction lowers federal income tax only. Social Security and Medicare still apply.
How much can servers deduct?
Up to $25,000 of qualified tips per tax return, for 2025 through 2028. It shrinks by $100 for each full $1,000 of income over $150,000 ($300,000 joint).
Do I still pay Social Security and Medicare on tips?
Yes. The deduction only lowers federal income tax. Payroll or self-employment tax and state tax don’t change.
Related tools and guides
- BartendersCode 101. W-2 code TP.
- Baristas and Counter WorkersCode 107. W-2 code TP.
- Hotel HousekeepersCode 304. W-2 code TP.
- No tax on tips calculatorW-2 code TP, box 14b and 1099 tips, with the net-profit limit.
- IRS tipped occupations listAll 71 Treasury Tipped Occupation Codes, searchable.
- W-2 code TP and box 14bCash tips reported to your employer and your occupation code.
- No tax on tips by jobBartenders, servers, stylists, drivers and more.