[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-304559-105":3,"detail-sidebar-cat-1-en-105":80,"doc-detail-304559-en":126},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":73,"head_meta":75,"extra_data":77,"updated_unix":79},105,"en","no-tax-on-tips-obbba-2025-2028-employer-guide","No Tax On Tips - OBBBA 2025-2028 - Employer Guide","","Key policy facts explain how the new federal income tax deduction for qualified tips works for tax years 2025–2028, including potential deductions up to $25,000 for eligible employees. It clarifies that the benefit applies only to qualified tips reported on Form W-2 and that normal withholding, Social Security, and Medicare taxes continue for all tip income. Employer responsibilities and recommended processes are provided, including reasonable W-2 reporting methods for qualified tips and tips on payroll system setup, data verification, and employee communications.",{"@graph":14,"@context":72},[15,34,55],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/template/","Template",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/template/letters/","Letters",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/template/no-tax-on-tips-obbba-2025-2028-employer-guide/304559/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/no-tax-on-tips-obbba-2025-2028-employer-guide/304559.png","ImageObject",442,249,{"name":42,"@type":43},"Gloria","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-09-29","2026-09-19",true,{"@type":52,"interactionType":53,"userInteractionCount":33},"InteractionCounter",{"@type":54},"ViewAction",{"@type":56,"mainEntity":57},"FAQPage",[58,64,68],{"name":59,"@type":60,"acceptedAnswer":61},"What is the federal deduction for tipped employees for 2025–2028?","Question",{"text":62,"@type":63},"The law allows employees to claim an above-the-line deduction for qualified tips (and qualified overtime premium) for tax years 2025–2028.","Answer",{"name":65,"@type":60,"acceptedAnswer":66},"Which employees and occupations qualify for the tip deduction?",{"text":67,"@type":63},"Workers in occupations that customarily receive tips qualify, including roles such as restaurant servers, bartenders, salon workers, hotel staff, delivery drivers, baristas, and valet drivers. Qualified occupations follow the IRS Treasury Tipped Occupation Code (TTOC) system.",{"name":69,"@type":60,"acceptedAnswer":70},"What must employers do for the 2025 tax year reporting?",{"text":71,"@type":63},"Employers should continue normal withholding and payroll tax processes, keep reporting qualified tips using a “reasonable method” separate from other withholdings, and verify payroll and timekeeping data—especially for voluntary tips.","https://schema.org",{"og:url":32,"og:type":74,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":76,"canonical":32},"index,follow",{"doc_id":78,"site_id":7},304559,1790298912,{"code":4,"msg":81,"data":82},"success",[83,88,93,98,103,108,113,117,122],{"id":84,"doc_module":22,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},11,"Presentations",90,"presentations",{"id":89,"doc_module":22,"doc_module_name":25,"category_name":90,"show_sort_weight":91,"slug":92},12,"Resumes",80,"resumes",{"id":94,"doc_module":22,"doc_module_name":25,"category_name":95,"show_sort_weight":96,"slug":97},14,"Invoices",70,"invoices",{"id":99,"doc_module":22,"doc_module_name":25,"category_name":100,"show_sort_weight":101,"slug":102},15,"Posters",60,"posters",{"id":104,"doc_module":22,"doc_module_name":25,"category_name":105,"show_sort_weight":106,"slug":107},16,"Social Media",50,"social-media",{"id":109,"doc_module":22,"doc_module_name":25,"category_name":110,"show_sort_weight":111,"slug":112},17,"Forms",40,"forms",{"id":114,"doc_module":22,"doc_module_name":25,"category_name":29,"show_sort_weight":115,"slug":116},18,30,"letters",{"id":118,"doc_module":22,"doc_module_name":25,"category_name":119,"show_sort_weight":120,"slug":121},21,"Paper Templates",5,"papers-templates",{"id":123,"doc_module":22,"doc_module_name":25,"category_name":124,"show_sort_weight":4,"slug":125},158,"General","general-158",{"code":4,"msg":81,"data":127},{"doc_id":78,"user_id":128,"nickname":42,"user_avatar":129,"doc_module":22,"category_id":114,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":33,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":135,"language":136,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":137,"faqs":138,"seo_title":139,"seo_description":12,"update_tm":140,"read_time":30},2336474459895,"https://ap-avatar.wpscdn.com/avatar/22000baeef7a5ed0655?x-image-process=image/resize,m_fixed,w_180,h_180&k=1786071322749376916","TM  \nOBBBA 2025-2028  \nWhat employers need to know about the new federal income tax deduction for tipped employees.  \nKey Policy Facts for Employers  \nEmployees may be able to claim up to a $25,000 federal income tax deduction for tax years 2025-2028  \nOnly applies to qualified tips that appear on Form W-2  \nEmployers continue normal  \nwithholding and payroll tax obligations  \nNew W-2 reporting requirements will be implemented to help employees claim this benefit  \nSocial Security and Medicare taxes still apply to all tip income  \nWhat Changed  \nThis new law allows employees to  \nclaim an above-the-line deduction for qualified tips they receive during the year.  \nWhat Jobs Qualify?  \nThe deduction applies to workers in qualified tipearning occupations, including but not limited to restaurant servers, bartenders, salon workers, hotel staff, delivery drivers, baristas, and  \nvalet drivers.  \nEmployees should seek guidance from a tax professional regarding this deduction.  \nQualified tip-earning occupations are assigned a 3-digit code organized by the IRS’s Treasury Tipped Occupation Code (TTOC).  \nCATEGORY  \nBeverage + Food Service  \nEntertainment + Events  \nHospitality + Guest Services  \nHome Services  \nPersonal Services  \nPersonal Appearance + Wellness  \nRecreation + Instruction  \nTransportation + Delivery  \nTTOC 100s 200s 300s 400s 500s 600s 700s 800s  \nWHAT TIPS QUALIFY?  \nThis new law allows employees to claim an above-the-line deduction for Qualified Tips they receive during the year  \nRECEIPT \\#NO-TAX-ON-TIPS  \nQualifying Tips  \nVoluntary Cash Tips   Qualify Charged Tips   Qualify Pooled Tips   Qualify Shared Tips   Qualify  \nNon-Qualifying Tips  \nAutomatic Gratuities   Non-Qualifying Service Charges   Non-Qualifying Unreported Tips   Non-Qualifying  \nOBBBA 2025-2028  \nEMPLOYER  \nRESPONSIBILITIES  \nContinue Normal Operations  \nKeep withholding federal income tax on all tip income. This deduction does not change your payroll tax obligations. Social Security and Medicare still applies and there are no changes to state or local taxes.  \nReport Qualified Earnings  \nThere is no change toW-2 format for 2025, however, employers must use a “reasonable method”to report qualified tips separate from other withholdings.  \nRECOMMENDATIONS  \n Verify the accuracy of payroll and timekeeping data, particularly for voluntary tips.  \n Verify that payroll and timekeeping systems are equipped to identify and report on voluntary tips, and isolate them from non-deductible service charges.  \n Establish clear channels for sharing year-end summaries or periodic reports with employees  \nTM  \nHow BBSI Can Help  \nBBSI provides guidance to clients on tax reporting, processes payroll batches to record qualified earnings, and provides Payroll Check Allocation (PCA) reports that show qualified tip earnings via the myBBSI Portal.  \nRESOURCES   \nFor more info, [visit ](visit www.irs.gov)[www.irs.gov](visit www.irs.gov).  \nFor the 2025 tax year, the IRS is providing a Transition Relief period.  \nThis means employers will not face penalties for failing to provide estimates or for providing incorrect estimates related to qualified overtime. They also allow “any reasonable method”to report qualified tip premiums on W-2s or to provide to the employee.  \nFAQ-OBBBA’sNo Tax On Tips  \nWhat is the Big Beautiful Bill?  \nA federal law allowing deductions for qualified tips and qualified overtime premium for tax years 2025–2028.  \nWho qualifies for the tip deduction? Workers in occupations that customarily receive tips.  \nHow much can be deducted for tips? Up to $25,000 in qualified tips per year, per IRS guidance.  \nIs there a penalty for incorrect reporting? During a Transition Relief period, employers will not face penalties for  \nfailing to provide estimates or for providing incorrect estimates related to qualified tips.  \nWhat tips qualify?  \nQualified tips include voluntary cash tips, charged tips, pooled tips, and shared tips.  \nWhat should employers do for the 2025 tax year?  \n","cbCaiehF1ML8Cmxn","https://ap.wps.com/l/cbCaiehF1ML8Cmxn","pdf",14373812,7,"English","# Key Policy Facts for Employers\n## What Changed\n# What Jobs Qualify?\n# What Tips Qualify?\n# Employer Responsibilities\n## Continue Normal Operations\n## Report Qualified Earnings\n# Recommendations\n# How BBSI Can Help\n# Resources\n# FAQ","[{\"question\":\"What is the federal deduction for tipped employees for 2025–2028?\",\"answer\":\"The law allows employees to claim an above-the-line deduction for qualified tips (and qualified overtime premium) for tax years 2025–2028.\"},{\"question\":\"Which employees and occupations qualify for the tip deduction?\",\"answer\":\"Workers in occupations that customarily receive tips qualify, including roles such as restaurant servers, bartenders, salon workers, hotel staff, delivery drivers, baristas, and valet drivers. Qualified occupations follow the IRS Treasury Tipped Occupation Code (TTOC) system.\"},{\"question\":\"What must employers do for the 2025 tax year reporting?\",\"answer\":\"Employers should continue normal withholding and payroll tax processes, keep reporting qualified tips using a “reasonable method” separate from other withholdings, and verify payroll and timekeeping data—especially for voluntary tips.\"}]","No Tax On Tips - OBBBA 2025-2028 - Employer Guide | PDF",1789814856]