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Home/Tip Tax Calculator/South Dakota
NEW 2025 LAW — Up to $25,000 in tips are now federal tax-free

South Dakota Tip Tax
Calculator 2026

In South Dakota, tipped workers pay NO state income tax on tips. Plus, the federal No Tax on Tips law lets you deduct up to $25,000 — saving you thousands.

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
0%
TIP TAX CALCULATOR
2026 NO TAX ON TIPS LAW
Tax Deduction Applied
$15,000
YOUR SAVINGS
SOUTH DAKOTA · 2026
Tips Earned$15,000
Tax-Free Deduction$15,000
Taxable Tips Remaining$0
Federal Tax Saved+$2,585
South Dakota State Tax Saved$0 (no state tax)
FICA (still owed on tips)-$1,148
Total Tax Saved+$2,585

No Tax on Tips in South Dakota — 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.

South Dakota workers get a double benefit: no federal tax on tips (up to $25,000) AND no state income tax — making South Dakota one of the best states for tipped workers.

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