--- title: "How to Claim the Tip Deduction on Schedule 1-A" description: "You claim it on Schedule 1-A (Form 1040), Part II, when you file your federal return, using qualified tip amounts from your W-2, 1099, or Form 4137." url: https://www.tipmaxapp.com/us/answers/how-to-claim-schedule-1a language: en publisher: TipMax (Entermaurs Incorporated) date_published: 2026-09-23 last_verified: 2026-09-23 --- # How do I claim No Tax on Tips on my tax return? **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.** ## 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](https://www.tipmaxapp.com/us/answers/w2-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](https://www.tipmaxapp.com/us/answers/form-4137-unreported-tips-and-deduction). 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?](https://www.tipmaxapp.com/us/answers/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 - [IRS newsroom: Schedule 1-A published (IR-2026-28)](https://www.irs.gov/newsroom/irs-published-schedule-taxpayers-will-use-to-claim-deductions-on-no-tax-on-tips-no-tax-on-overtime-no-tax-on-car-loans-no-tax-on-seniors) - [Schedule 1-A (Form 1040)](https://www.irs.gov/pub/irs-pdf/f1040s1a.pdf) - [IRS: 2026 draft Schedule 1-A (if applicable to your filing year)](https://www.irs.gov/pub/irs-dft/f1040s1a--dft.pdf) - [IRS: Tip recordkeeping and reporting](https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting) - [IRS: Notice 2025-69 (2025 guidance and transition)](https://www.irs.gov/pub/irs-drop/n-25-69.pdf) ## Last verified September 23, 2026. 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. ## Related - [How No Tax on Tips works](https://www.tipmaxapp.com/us/answers/how-no-tax-on-tips-works-2026) - [Do I still pay Social Security and Medicare?](https://www.tipmaxapp.com/us/answers/do-i-still-pay-social-security-medicare-on-tips) - [W-2 box 12 code TP](https://www.tipmaxapp.com/us/answers/w2-box-12-code-tp-explained) - [Multiple jobs](https://www.tipmaxapp.com/us/answers/no-tax-on-tips-multiple-jobs) - [Dollar cap and phase-out](https://www.tipmaxapp.com/us/answers/no-tax-on-tips-dollar-cap-and-phase-out) ## How TipMax helps with this You’ll want your year’s tip total in hand. TipMax is an iPhone app for servers and bartenders that tracks tips and tip-outs and turns a restaurant menu into study flashcards. - Weekly, monthly, and pay-period totals. Download TipMax free: https://apps.apple.com/us/app/tipmax-study-track-earn/id6744850146 --- 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.