Treasury Department Releases “Preliminary List” of “No Tax on Tips” Occupations

The Treasury Department this week released a “preliminary list” of occupations that may be entitled to claim the “no tax on tips” deduction. As a reminder, the “One Big Beautiful Bill Act” (OBBBA) provides an above-the-line tax deduction for “qualified tips.” To qualify for the deduction, the tips must (among other conditions) be received by an individual engaged in an occupation that “customarily and regularly received tips” on or before December 31, 2024. The OBBBA requires the Treasury secretary to publish an official list of qualifying occupations by October 2, 2025.

Notably, the Treasury Department’s preliminary list of occupations that “customarily and regularly received tips” includes many occupations that the U.S. Department of Labor (DOL) has long interpreted as *not* customarily and regularly receiving tips, such as dishwashers and cooks. This is an important difference. The DOL has construed the Fair Labor Standards Act (FLSA) to prohibit employers from applying a “tip credit” to satisfy the minimum wage obligation for employees who are not engaged in an occupation that customarily and regularly receives tips. Further, when an employer does take a tip credit, only employees who also “customarily and regularly receive tips” can participate in a mandatory tip pool.¹ It had been assumed that the Treasury secretary would align its list with the DOL’s approach due to the use of the parallel “customarily and regularly” language in both the FLSA and the OBBBA. It remains to be seen whether the Treasury secretary will attempt to reconcile its final list with the DOL’s approach (or whether the broader interpretation suggested by the Treasury Department’s preliminary list may one day influence the DOL’s narrower interpretation).

Another potential consequence of the Treasury Department’s broad preliminary list is that it may ease the reporting burden of employers that were concerned that the OBBBA might require them to separately track tips received by dual job employees while working in traditional tipped occupations (like wait staff and bartender) from tips received from a tip pool by that same employee while working in another position (like dishwasher or cook), assuming that only the former category of tips would qualify for the deduction.

The Treasury Department’s preliminary list includes 68 occupations spread across eight industries:

Beverage & Food Service

• Bartenders
• Wait Staff
• Food Servicers, Nonrestaurant
• Dining Room and Cafeteria Attendants and Bartender Helpers
• Chefs and Cooks
• Food Preparation Workers
• Fast Food and Counter Workers
• Dishwashers
• Host Staff, Restaurant, Lounge, and Coffee Shop
• Bakers

Entertainment & Events

• Gambling Dealers
• Gambling Change Persons and Booth Cashiers
• Gambling Cage Workers
• Gambling and Sports Book Writers and Runners
• Dancers
• Musicians and Singers
• Disc Jockeys, Except Radio
• Entertainers and Performers
• Digital Content Creators
• Ushers, Lobby Attendants, and Ticket Takers
• Locker Room, Coatroom, and Dressing Room Attendants

Hospitality & Guest Services

• Baggage Porters and Bellhops
• Concierges
• Hotel, Motel, and Resort Desk Clerks
• Maids and Housekeeping Cleaners

Home Services

• Home Maintenance and Repair Workers
• Home Landscaping and Groundskeeping Workers
• Home Electricians
• Home Plumbers
• Home Heating and Air Conditioning Mechanics and Installers
• Home Appliance Installers and Repairers
• Home Cleaning Service Workers
• Locksmiths
• Roadside Assistance Workers

Personal Services

• Personal Care and Service Workers
• Private Event Planners
• Private Event and Portrait Photographers
• Private Event Videographers
• Event Officiants
• Pet Caretakers
• Tutors
• Nannies and Babysitters

Personal Appearance & Wellness

• Skincare Specialists
• Massage Therapists
• Barbers, Hairdressers, Hairstylists, and Cosmetologists
• Shampooers
• Manicurists and Pedicurists
• Eyebrow Threading and Waxing Technicians
• Makeup Artists
• Exercise Trainers and Group Fitness Instructors
• Tattoo Artists and Piercers
• Tailors
• Shoe and Leather Workers and Repairers

Recreation & Instruction

• Golf Caddies
• Self-Enrichment Teachers
• Recreational and Tour Pilots
• Tour Guides and Escorts
• Travel Guides
• Sports and Recreation Instructors

Transportation & Delivery

• Parking and Valet Attendants
• Taxi and Rideshare Drivers and Chauffeurs
• Shuttle Drivers
• Goods Delivery People
• Personal Vehicle and Equipment Cleaners
• Private and Charter Bus Drivers
• Water Taxi Operators and Charter Boat Workers
• Rickshaw, Pedicab, and Carriage Drivers
• Home Movers

The Treasury Department stated that an “official proposed list” (which is expected to be “substantially the same” as the preliminary list) will be published in the Federal Register, at which time public comments will be requested. Employers with employees who receive tips and who are hoping to take advantage of the OBBBA’s “no tax on tips” deduction should continue to monitor developments and may want to submit comments at the appropriate time.