The Treasury Department has officially released its final list of occupations eligible for the new “no tax on tips” deduction under the One Big Beautiful Bill Act (OBBBA). Published on October 2, 2025, the list offers the first formal look at how Treasury is applying the phrase “customarily and regularly receives tips.” The inclusion of certain roles may raise questions for employers, particularly where definitions differ from existing labor standards.
Notably, the list includes some occupations not traditionally recognized as tipped under current Department of Labor (DOL) rules, such as cooks, dishwashers, tattoo artists, and tour guides, indicating a broader interpretation of tipping practices across industries.
The Treasury’s final list organizes tipped occupations into eight broad categories; each assigned a three-digit code. This system is designed to help define eligibility for the OBBBA’s tip deduction:
- 100s – Beverage and Food Service
- 200s – Entertainment and Events
- 300s – Hospitality and Guest Services
- 400s – Home Services
- 500s – Personal Services
- 600s – Personal Appearance and Wellness
- 700s – Recreation and Instruction
- 800s – Transportation and Delivery
In total, 68 occupations are included. These roles represent a wide range of industries where tipping is either common or occurs on a regular basis.
While the Treasury list is intended to support a tax deduction under the OBBBA, it does not align with how the DOL defines tipped work under the Fair Labor Standards Act (FLSA). For example, under FLSA, roles like cooks and dishwashers are not eligible for tip pooling or the tip credit toward minimum wage. However, the Treasury included these occupations for the purpose of the deduction.
This difference may create some issues for employers that are subject to both tax and hourly wage rules. It is currently unclear whether the two agencies will seek to align their definitions in future guidance.
Potential adjustments for employers may need to be made following the broad scope of the Treasury’s list. Employers with workers who perform both tipped and non-tipped functions may benefit from reduced administrative burdens if both roles fall under the Treasury’s approved list. Businesses may need to reassess their tip-tracking systems to ensure proper documentation for the new deduction, even if their employees aren’t traditionally classified as tipped under the FLSA. Additionally, employers should be aware of the differences between Treasury and DOL definitions to remain complaint across both tax and labor regulations.
To prepare for the implementation of the new tip deduction, employers may want to take several steps. First, it’s important to review the final list of occupations released by Treasury to determine whether any roles within your organization are affected. This initial review can help identify employees who may be eligible for the deduction and flag any positions that could require further evaluation.
Next, employers should assess their current payroll and tip reporting processes to ensure they meet IRS requirements. Accurate tracking and documentation of tipped income will be essential for both compliance and for employees seeking to claim the deduction.
Additionally, staying informed of future guidance from both the Treasury Department and the Department of Labor will be important. As the implementation continues, more guidance may be provided, especially where rules or definitions overlap or conflict.
The Treasury Department has indicated that the final list is “substantially the same” as the preliminary version released earlier in 2025. While few changes are expected, additional clarification may be issued as tax season approaches or in response to ongoing public comment and feedback. For now, the final list provides a clearer framework for understanding which occupations may qualify for the tip deduction under the OBBBA, even in cases where those roles are not traditionally classified as tipped positions under labor regulations.
If you have questions about how this development could impact your business or your employees, we suggest you consult with your tax advisor or legal counsel. We will continue to monitor updates from Treasury and other federal agencies and share new information as it becomes available.
