IRS Issues Final Regulations on “No Tax on Tips” Deduction for Qualified Tipped Occupations

The IRS issued final regulations implementing the “No Tax on Tips” provision, allowing eligible workers in more than 70 occupations to claim a deduction for qualified tips. The regulations, issued after consideration of more than 300 public comments and a public hearing, categorize tipped occupations into eight groups, including food service and transportation, and define qualified tips as amounts paid voluntarily in cash or cash equivalents that are properly reported on tax forms. The rules expand the list of eligible occupations to include visual artists, floral designers, and gas pump attendants, and clarify that mandatory service charges generally do not ...