No Tax on Tips Calculator 2026
See how much you save under the proposed No Tax on Tips exemption "” up to $25,000 in tip income tax-free per year.
All calculations in your browser "” data never sent anywhere
Important: Current Status of No Tax on Tips
The No Tax on Tips exemption was proposed during the 2024 campaign and has been discussed in Congress. As of early 2026, it has not been signed into law. This calculator shows your potential savings if the exemption is enacted with a $25,000 annual cap. Check IRS.gov for current status before making tax decisions.
No Tax on Tips "” FAQ
Who qualifies for No Tax on Tips?
Under the proposed legislation, workers in traditionally tipped occupations qualify "” servers, bartenders, hotel staff, hair stylists, valets, and similar roles. Salaried workers and those who receive tips incidentally would not qualify.
Is there a cap on tax-free tip income?
The most commonly discussed version caps the exemption at $25,000 per year in tip income. Tips above $25,000 would still be taxed normally. Workers earning under $160,000 in wages would qualify.
Does it eliminate FICA on tips too?
Some versions of the proposal include FICA (Social Security and Medicare) exemption on tips, which would be an additional 7.65% savings. This calculator includes FICA savings in the total.
Do I still need to report tips?
Yes "” all tips must still be reported to your employer and on your tax return. The exemption means they would not be taxed, but they still count as income for certain purposes like Social Security credits.