How do I claim No Tax on Tips on my tax return?

🇺🇸 US rulesVerified September 23, 2026

The short answer

You claim it on Schedule 1-A (Form 1040), Part II: No Tax on Tips, when you file your federal return. You’ll need your qualified tip amounts from W-2 or 1099 forms and/or Form 4137, a valid SSN, and, if married, a joint return. The form applies the $25,000 cap and the MAGI phase-out ($150,000, or $300,000 joint; $100 per full $1,000 over). TipMax helps you track tips but does not file Schedule 1-A.

Example math

Qualified tips for the year: $18,000. Filing single. MAGI $140,000 (under the phase-out). Illustrative marginal rate 22% (illustrative only; enter your own marginal rate).

  1. Enter qualified tips on Schedule 1-A Part II as the form and its instructions direct for your tax year.
  2. Cap check: min($18,000, $25,000) = $18,000.
  3. Phase-out: MAGI under $150,000 → no reduction.
  4. Deduction = $18,000. Illustrative income-tax savings ≈ $3,960 at 22%.
  5. Separately, FICA on your tips still generally applied during the year.

Not tax advice.

Check your estimate

Use the estimate to sanity-check your tax software, not to replace the form. If you have more than one employer, follow the Schedule 1-A instructions; the calculator doesn’t split tips across jobs.

Open the calculator

Plain English

Step-by-step checklist

  1. All year: Record tips, report them to your employer as required, and keep tip-out notes.
  2. January: Collect your W-2(s). For 2026, look for box 12 code TP and the occupation code in box 14b. See W-2 box 12 code TP explained.
  3. If you have unreported tips: You may need Form 4137. Tips reported on Form 4137 can count toward qualified tips. See Form 4137 and unreported tips.
  4. File: Complete Schedule 1-A Part II, and follow the Form 1040 instructions for where the Schedule 1-A total goes.
  5. Married: Plan to file jointly if you want this deduction.
  6. Don’t skip state: The federal deduction isn’t an automatic state tax break. See does No Tax on Tips apply to state taxes?

What the “transition year” confusion is about

2025 returns used Schedule 1-A even while information-return boxes were still transitioning (under Notice 2025-69, the 2025 W-2 was unchanged). 2026 employer statements use clearer tip coding (code TP and the occupation code in box 14b). Read the instructions for the tax year you’re filing.

Common mistakes

  • Waiting until April with no tip log.
  • Entering auto-grat as qualified tips.
  • Filing married separately and wondering why the software blocks the deduction.
  • Treating TipMax or any tip tracker as a substitute for Form 1040.

Official sources

Last verified:

Sources checked: IR-2026-28, Schedule 1-A, Notice 2025-69, and the 2026 Form W-2 instructions. Confirmed: the Schedule 1-A Part II claim path, the $25,000 cap and MAGI phase-out, joint-filing and SSN rules, W-2 code TP and box 14b for 2026, and the Form 4137 path.

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TipMax Answers explains public IRS guidance in plain English for tipped workers. It is not tax, legal, or accounting advice. Rules can change. Confirm figures on IRS.gov and with a qualified tax professional before you file. TipMax the app helps you track tips and true hourly pay; it does not file your taxes. TipMax helps you track tips for cleaner year-end totals; it does not prepare or file Schedule 1-A.