Millions of service workers who rely on tips could save big when they file their taxes in 2026 thanks to President Donald Trump’s “Big Beautiful Bill.”

The legislation included the creation of an above-the-line deduction for tips earned in traditionally tipped occupations, meaning those workers can now deduct tips from their taxable income, exempting those earnings from federal income taxes.

The deduction applies to the entirety of tax year 2025, which Americans will file returns for in early 2026.

Workers can deduct up to $25,000 per year in qualified tips, which includes cash tips, tips paid by card and tips earned through tip-sharing arrangements.

The legislation defines qualified tips as “tips received by an individual in an occupation which customarily and regularly received tips

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