Internal Revenue Code · 26 U.S.C.
§ 224. Qualified tips
Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).
Cite as 26 U.S.C. § 224
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- July 4, 2025 by Pub. L. 119–21
- Length
- 8 subsections · 690 words · about 3 min to read
- Defines
- 4 terms
- Cross-references
- cites 5; cited by 5 Code sections and 0 other regulations
- Regulations
- 1 issued under this section
There shall be allowed as a deduction an amount equal to the qualified tips received during the taxable year that are included on statements furnished to the individual pursuant to section 6041(d)(3), 6041A(e)(3), 6050W(f)(2), or 6051(a)(18), or reported by the taxpayer on Form 4137 (or successor).
The amount allowed as a deduction under this section for any taxable year shall not exceed $25,000.
For purposes of this paragraph, the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.
In the case of qualified tips received by an individual during any taxable year in the course of a trade or business (other than the trade or business of performing services as an employee) of such individual, such qualified tips shall be taken into account under subsection (a) only to the extent that the gross income for the taxpayer from such trade or business for such taxable year (including such qualified tips) exceeds the sum of the deductions (other than the deduction allowed under this section) allocable to the trade or business in which such qualified tips are received by the individual for such taxable year.
The term “qualified tips” means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024, as provided by the Secretary.
For purposes of paragraph (1), the term “cash tips” includes tips received from customers that are paid in cash or charged and, in the case of an employee, tips received under any tip-sharing arrangement.
No deduction shall be allowed under this section unless the taxpayer includes on the return of tax for the taxable year such individual’s social security number.
For purposes of paragraph (1), the term “social security number” shall have the meaning given such term in section 24(h)(7).
If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year.
The Secretary shall prescribe such regulations or other guidance as may be necessary to prevent reclassification of income as qualified tips, including regulations or other guidance to prevent abuse of the deduction allowed by this section.
No deduction shall be allowed under this section for any taxable year beginning after December 31, 2028.
(Added Pub. L. 119–21, title VII, § 70201(a), July 4, 2025, 139 Stat. 170.)
Terms defined here
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Regulations under this section
Treasury regulations (26 CFR) issued under § 224
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 5 other sections
- § 6041(d)(3) Information at source
- § 911 Citizens or residents of the United States living abroad
- § 199A(d)(2) Qualified business income
- § 24(h)(7) Child tax credit
- § 7703 Determination of marital status
Cited by 5 Code sections
Amendment history
From the source credit and the official notes, newest first.
- Added by Pub. L. 119–21
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter B Computation of Taxable Income
- Part VII ADDITIONAL ITEMIZED DEDUCTIONS FOR INDIVIDUALS
Nearby sections
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
Prior Provisions
A prior section 224 was sucessively renumbered section 225, then 226, of this title by Pub. L. 119–21, title VII, §§ 70201(a), 70202(a), July 4, 2025, 139 Stat. 170, 174.
Statutory Notes and Related Subsidiaries
Effective Date
Section applicable to taxable years beginning after Dec. 31, 2024, see section 70201(j) of Pub. L. 119–21, set out as an Effective Date of 2025 Amendment note under section 45B of this title.
Published List of Occupations Traditionally Receiving Tips
Pub. L. 119–21, title VII, § 70201(h), July 4, 2025, 139 Stat. 173, provided that: “Not later than 90 days after the date of the enactment of this Act [July 4, 2025], the Secretary of the Treasury (or the Secretary’s delegate) shall publish a list of occupations which customarily and regularly received tips on or before December 31, 2024, for purposes of section 224(d)(1) of the Internal Revenue Code of 1986 (as added by subsection (a)).”