Starting June 12, 2026, a restaurant server in Dallas who earns $28,000 a year in tips will be able to shield up to $25,000 of that income from federal taxes. She is one of an estimated 4 million to 6 million tipped workers across the country who stand to benefit from final regulations the Treasury Department and IRS published on April 13, 2026, in the Federal Register as 91 FR 19026.
The rules implement the “no tax on tips” provision of the One Big Beautiful Bill Act (Public Law 119-21). The provision was championed by President Donald Trump, who made eliminating taxes on tips a signature campaign pledge during the 2024 presidential race. The idea drew bipartisan interest, and Congress included it in the broader tax package that became law earlier this year. That legislation created IRC Section 224, a new section of the tax code, and directed Treasury to define “qualified tips” and publish a list of occupations where workers “customarily and regularly” receive them. The final regulations deliver that framework, giving tipped employees and tax preparers concrete guidance before the deduction takes effect.
What the final rules actually do
The regulations establish three core elements.
Eligibility is occupation-based, not employer-based. A bartender qualifies because bartending is a tipped occupation, regardless of whether the bar sits inside a hotel, a stadium, or a standalone restaurant…