NEW 2025 LAW — Up to $25,000 in tips are now federal tax-free
New Jersey Tip Tax
Calculator 2026
In New Jersey, the No Tax on Tips law removes federal tax on up to $25,000 of tips. You also save on 6.37% state income tax.
No Tax on Tips Law Federal + State 2026 Rules 100% Private
Max Tip Deduction
$25,000
Effective From
Jan 1, 2025
Income Phase-Out
$150,000
Your State Tax
6.37%
TIP TAX CALCULATOR
2026 NO TAX ON TIPS LAW
Tax Deduction Applied
$15,000
YOUR SAVINGS
NEW JERSEY · 2026
Tips Earned$15,000
Tax-Free Deduction$15,000
Taxable Tips Remaining$0
Federal Tax Saved+$2,585
New Jersey State Tax Saved+$956
FICA (still owed on tips)-$1,148
Total Tax Saved+$3,541
No Tax on Tips in New Jersey — 2026 Guide
The No Tax on Tips law, effective January 1, 2025, allows tipped workers to deduct up to $25,000 in tip income from their federal taxable income. This applies to workers in traditional tipping industries — restaurants, hotels, salons, and more.
In New Jersey, the federal deduction reduces your 6.37% state tax burden too — since many state tax calculations start from federal adjusted gross income.
Compare tip taxes across all 50 states →