For this year's tax season, workers who received tips as part of their income during 2025 could benefit from a tax exemption due to the passage of the “One Big Beautiful Bill”, which aims to deduct up to $25,000 in tips from their taxable income. federal taxable income.

According to the rule, workers who qualify for this exemption are those who receive voluntary tips from customers, and these must be received in cash or another form of payment, such as a check.

In this case, workers will not be able to claim the deduction if the tips are automatic service charges or received in digital assets, such as cryptocurrencies, among others.

To calculate the amount of tips that qualify for this reduction, the Internal Revenue Service (IRS) stated that workers can find this information “on a Form W-2, Form 1099-NEC, Form 1099-MISC, Form 1099-K, or Form 4137,” the tax authority noted.

During this 2026 tax season, workers who claim the deduction could see a tax reduction of up to $1,400; However, Andrew Lautz, director of tax policy at the Bipartisan Policy Center, pointed out that “if someone claims the maximum tip deduction and is in the highest tax bracket that makes them eligible for that maximum deduction, which is the 24% bracket, they will see a tax cut of up to $6,000,” he emphasized. Finally, recent data published by the IRS indicates that, just one month into tax season, average tax refunds have increased by 14.2% compared to 2015.

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