New “No Tax on Tips” Deduction Could Cut Workers’ Federal Tax Bill by $1,400 on Average

Millions of tipped workers could see federal income tax relief on their tip earnings this tax season, thanks to a new deduction in the federal tax code. According to IRS guidance, the deduction lets eligible workers exclude some or all of their tip income from federal taxable income, potentially boosting refunds for 2025 returns filed in 2026.

The change…