09/07/2026
The IRS wrote valet parker down.
Labor Day is a good day to read your own paperwork. Treasury and the IRS published the final list of jobs that qualify for the no-tax-on-tips deduction, and code 801 is Parking and Valet Attendants — the examples printed in the rule are parking garage attendant and valet parker. (91 FR 19026, final rule, April 13, 2026.)
Here is the honest version of what that means. Qualified tips are deductible up to 25,000 dollars per return. It phases down above 150,000 dollars of income, 300,000 filing jointly, and it ends after tax year 2028. Married filing separately gets nothing. And the part that catches people: automatic gratuities and mandatory service charges are not qualified tips. A fee the venue bills does not count. A tip a guest chooses to leave does.
Three more things worth saying out loud. It is a deduction, not a raise. It applies to federal income tax only — the rule states plainly that it does not apply for F**A, so payroll tax is untouched. And you cannot deduct tips that were never reported: they have to show up on a W-2 or a 1099, or be self-reported on Form 4137.
One number from Treasury's own table, tax year 2023: among parking and valet attendants who do report tips, reported tips equal 21.5 percent of wages — and only 17.4 percent report at least 100 dollars of tips at all.
Share this with somebody who works for tips and has not heard about it yet.