Why only five states?

This is an approved pilot: California, New York, Texas, Florida and Nevada. They were chosen to cover graduated brackets, a top-rate state, and three states with no individual income tax on wages. More states are added one reviewed batch at a time rather than generated as thin duplicates.

Do you publish a list of which states follow the federal tips deduction?

No. We have not verified any state's current conformity position against a first-party source, so we do not assert a status or publish a list. Verify with your state tax agency (IRS list of state government websites) before filing; sources last checked 2026-11-12.

Is a mandatory service charge a qualified tip?

Not when the customer cannot disregard or modify it, and not when the amount was negotiated. The IRS final regulations (TD 10044) and IR-2026-49 draw that line; we do not decide it for you. If you are unsure, leave the eligibility selector on "Not sure" and treat the result as an upper-bound illustration.

Do I still owe Social Security and Medicare on tips?

Yes. The §224 deduction reduces federal income tax only. It does not change payroll taxes and is claimed when you file your return, not in your paycheck. Source: IRS Notice 2025-69, verified 2026-11-12.

Which years does the deduction cover?

Tax years 2025 through 2028. For 2025 there was reporting relief under IRS Notice 2025-69; from 2026 the information returns were revised to report qualified tips separately. Verify the current-year instructions before filing.

OBBBA §224 · Five-state pilot · Tax years 2025–2028

No Tax on Tips Calculator by State

The federal qualified-tips deduction is only half the story: a state may still tax the same tips. These pilot pages cover five states with very different tax structures. Every one states its sources and verification dates up front, and none claims to know a state's current conformity rule.

Sources last checked: 2026-11-12 · No state conformity assertion · Not tax advice

Why a state page at all?

The §224 deduction is taken on Schedule 1-A and reduces federal taxable income, not federal adjusted gross income. A state whose computation starts from federal AGI does not see it automatically. Whether a given state allows the deduction is a question of that state's own law.

We have not verified any state's current position against a first-party source, so these pages assert neither conformity nor decoupling. Each calculator starts from the conservative assumption that the state still taxes the tips you deducted federally, and lets you switch it after you have confirmed the rule with your state tax agency.

Verify before you file. Use the IRS list of state tax agencies to confirm your state's current treatment. City and county income taxes, where they exist, follow their own rules and are not modeled.

Pilot states

This is a five-state pilot, not a 50-state rollout. Pick your state below for a calculator with its own 2026 rate, a worked state-side estimate, and a FAQ that names its sources.

California — 13.3% top marginal rate (2026)
New York — 10.9% top marginal rate (2026)
Texas — no individual income tax on wages
Florida — no individual income tax on wages
Nevada — no individual income tax on wages

State rates shown are 2026 top marginal rates on wage income from Tax Foundation's 2026 rate tables (table as of January 1, 2026; compilation current through February 11, 2026; local taxes excluded), verified 2026-11-12. Your own marginal rate is usually lower, and every calculator lets you edit it. Some states changed rates mid-year — verify with your state tax agency.

What every pilot page tells you

Federal deduction, line by line. The $25,000 cap, the MAGI phase-out, the marital-status rule and the two worked examples published in TD 10044.
State layer, as an assumption. The rate is a prefilled estimate you can edit; the conformity switch is explicitly not a fact we assert.
What must be reported. Only qualified tips included on Form W-2, Form 1099-NEC, Form 1099-MISC, Form 1099-K, or reported by the worker on Form 4137 can be deducted (IRS IR-2026-49, verified 2026-11-12).
What we checked about the overtime W-2 cap. IRS Fact Sheet FS-2026-13 (verified 2026-11-13) is a §225 overtime FAQ with no box 12 code TT-style ceiling for §224 tips; the tips-side constraint is the reporting requirement above, which the pilot pages disclose.

FAQ

Why only five states?: This is an approved pilot: California, New York, Texas, Florida and Nevada. They were chosen to cover graduated brackets, a top-rate state, and three states with no individual income tax on wages. More states are added one reviewed batch at a time rather than generated as thin duplicates.
Do you publish a list of which states follow the federal tips deduction?: No. We have not verified any state's current conformity position against a first-party source, so we do not assert a status or publish a list. Verify with your state tax agency (IRS list of state government websites) before filing; sources last checked 2026-11-12.
Is a mandatory service charge a qualified tip?: Not when the customer cannot disregard or modify it, and not when the amount was negotiated. The IRS final regulations (TD 10044) and IR-2026-49 draw that line; we do not decide it for you. If you are unsure, leave the eligibility selector on "Not sure" and treat the result as an upper-bound illustration.
Do I still owe Social Security and Medicare on tips?: Yes. The §224 deduction reduces federal income tax only. It does not change payroll taxes and is claimed when you file your return, not in your paycheck. Source: IRS Notice 2025-69, verified 2026-11-12.
Which years does the deduction cover?: Tax years 2025 through 2028. For 2025 there was reporting relief under IRS Notice 2025-69; from 2026 the information returns were revised to report qualified tips separately. Verify the current-year instructions before filing.

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