New $25,000 tip tax deduction explained: who qualifies and how to claim it

The new $25,000 tip tax deduction applies from 2025 through 2028. File IRS Schedule 1-A to claim it. Only voluntary tips qualify. Income limits apply. Phaseout starts at $150,000 single and $300,000 joint. Maximum deduction is $25,000 per return. Mandatory gratuities do not qualify. Proper documentation is required. Payroll taxes still apply.