The tip deduction doesn’t completely eliminate taxes on tips. The deductible amount is limited, it isn’t available to every worker who receives tips, some tips aren’t deductible, and tips are still ...

The White House has reported that, on average, Americans will receive about $1,300 more in their pocket through the deduction.

A new tax deduction for tip income is available for 2025 federal income tax returns. Learn the new form to file, who qualifies, and income limits.