Married filing separately cannot claim this deduction at all
Modified adjusted gross income, before this deduction
Only jobs that customarily and regularly received tips before 2025 qualify
Which occupations are on the list?
Cash and charged tips, including tip-shares you received
Tips deduction
$0
Estimate for reference only, not verified proof — check the sources below, and their access date, before relying on this for a claim or filing.
- Statutory cap
- $25,000
- Estimated tax savings
- $0
- Deduction reaches $0 at this MAGI
- —
Available only for tax years 2025 through 2028. If you're self-employed, the deduction is also limited to your net income from the tip-earning business — not modelled here.
No tax on tips for restaurant hosts
Whether restaurant hosts qualify, the Treasury occupation code on your W-2, what counts as a tip in this job, and what the deduction is worth.
Yes — restaurant hosts are on Treasury's list of tipped occupations, as TTOC 109, so qualified tips from this work can be deducted from federal income tax, up to $25,000 a year through 2028, reduced above $150,000 of income ($300,000 filing jointly). In IRS data, tips made up 35.3% of pay for people in this occupation who reported tips.
Reviewed by RuleCost Editorial Team. Rules for 2026, updated 30 Sept 2026.
How to use it
- 1The calculator starts with $40,000 of income and $14,120 of tips, the typical tip share for restaurant hosts in IRS data. Replace both with yours.
- 2Choose your filing status. Married couples filing separately get no deduction.
- 3Read the deduction and the estimated federal income tax it saves.
Restaurant hosts at a glance
| Treasury Tipped Occupation Code | 109 |
|---|---|
| Official title | Host Staff, Restaurant, Lounge, and Coffee Shop |
| Category | Beverage and food service |
| Share who reported tips | 46.3% |
| Tips as share of pay, among those with tips | 35.3% |
| Share of all tips reported in the U.S. | 0.8% |
IRS figures for tax year 2023, from employees in the related occupation codes (35-9031). They include employees only, so self-employed workers aren't reflected. See all 71 codes.
What the deduction is worth
Take a single filer earning $40,000 in total, with tips making up 35.3% of it — the typical share for restaurant hosts who report tips. That is $14,120 of tips, all of it deductible, which saves an estimated $1,694 of federal income tax for the year. Social Security and Medicare tax on tips don't change.
What counts as a tip
You qualify through tips you receive from a tip pool or tip-sharing arrangement, not only tips handed to you directly. Your employer should include them in the tips reported on your W-2.
Where it shows on your W-2
As an employee, from tax year 2026 your qualified tips appear in Box 12 with code TP, and code 109 in Box 14b. If Box 14b says 000, your employer is treating the job as not qualifying — ask them why. See how to read the new W-2 boxes.
Questions
- Do restaurant hosts qualify for no tax on tips?
- Yes. Restaurant hosts are on Treasury's final list of occupations that customarily and regularly received tips, as TTOC 109 (Host Staff, Restaurant, Lounge, and Coffee Shop). Qualified tips from this work can be deducted from federal income tax for 2025 through 2028.
- What is the TTOC code for restaurant hosts?
- 109. It is in the beverage and food service category. From tax year 2026, employers put it in Box 14b of your W-2 next to the tips reported in Box 12 with code TP.
- How much can I deduct?
- Up to $25,000 of qualified tips a year, the same cap whether you file single or jointly. It shrinks by $100 for every $1,000 of income above $150,000 of income ($300,000 filing jointly). Married couples filing separately can't claim it.
- What counts as a tip for restaurant hosts?
- You qualify through tips you receive from a tip pool or tip-sharing arrangement, not only tips handed to you directly. Your employer should include them in the tips reported on your W-2.