LAS VEGAS (FOX5) — The U.S. Department of Treasury issued new guidance on the “No Tax On Tips” provision, listing the workers eligible and guidelines for filing and claiming deductions.
Nevada has the highest number of tip workers per capita, according to the Federal Reserve Bank of St. Louis.
The “No Tax on Tips” provision in the “Big Beautiful Bill” was signed by President Donald Trump on the Fourth of July. The latest guidance provides further details on how tip workers can and should file their taxes.
The list of 68 occupations is classified into eight categories:
- Beverage and Food Service
- Entertainment and Events
- Hospitality and Guest Services
- Home Services
- Personal Services
- Personal Appearance and Wellness
- Recreation and Instruction
- Transportation and Delivery
From bartenders to waiters, bellhops to ushers, many listed professions are common at resorts or properties across the Las Vegas Valley, also providing a range of services to tourists. Other jobs listed include various home service workers, from plumbers, electricians or landscapers.
Certified Public Accountant Kim Walker breaks down the reasoning for the guidance.
“There are already people trying to ‘jack’ the system, and the Treasury is saying ‘No. We’re going to preempt that by being clear about who is a tip earner,’” Walker said. “If you were not a tip earner prior to this, you can’t make yourself a tip earner now to take advantage of the tax deduction for tips,” she said.
The “No Tax on Tips” provision has the following guidelines:
- Workers can deduct up to $25,000 in eligible tips
- Tips can be taxed after wages exceed $150,000 (per spouse)
- The provision ends in 2028
There are also new key restrictions:
- You cannot file “Married, Separate” if you claim a tip deduction
- You cannot claim “automatic gratuity” towards your deduction amount
“It eliminates another loophole too, of calling things a tip that maybe weren’t a tip. It puts the onus on the customer to define what the tip is and how much it is,” Walker said.
Walker’s advice?
Keep a detailed record of all your tips. The records are critical for your tax filing– and will be needed in case of an audit.
Become familiar with the new “Schedule 1-A” form. Tip workers must fill out the form to claim the deduction.
As coffeeshop Sambalatte celebrates its 15th year at Boca Park, owner Luiz Oliviera said relief for workers and customers couldn’t come at a better time.
“We feel this ripple effect that comes from the Strip: a lot of our customers, they work in hospitality. If they’re not making money, they’re not going to spend money,” Oliviera said. “My baristas– I would say a third of the income is on tips,” he said.
“That means that everybody’s going to have an extra 20, 25% in their pocket to spend, which I truly believe is going to help our economy dramatically,” he said.
Copyright 2025 KVVU. All rights reserved.
