Beginning with the 2025 tax year, a new federal tax deduction may benefit tipped workers. The No Tax on Tips deduction  allows eligible individuals to deduct up to $25,000 of qualified tips  from taxable income. This deduction applies whether a taxpayer itemizes deductions or takes the standard deduction and is available through tax year 2028. It is important to note that tips are still required to be reported as income . The deduction applies only to qualified tips earned in