Occupations That Customarily and Regularly Received Tips; Definition of Qualified Tips

DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 10044] RIN 1545-BR63 Occupations That Customarily and Regularly Received Tips; Definition of Qualified Tips AGENCY: Internal Revenue Service (IRS), Treasury. ACTION: Final rule. SUMMARY: This document contains final regulations that identify occupations that customarily and regularly received tips on or before December 31, 2024, and provide a definition of qualified tips for purposes of the income tax deduction for qualified tips. These regulations affect individuals who receive tips as part of their occupation. DATES: Effective date: These final regulations are effective on June 12, 2026. Applicability date: For date of applicability, see § 1.224-1(i). FOR FURTHER INFORMATION CONTACT: Stephanie Caden or Andrew Holubeck at (202) 317-4774. SUPPLEMENTARY INFORMATION: Authority These final regulations contain amendments to the Income Tax Regulations (26 CFR part 1) under section 224 of the Internal Revenue Code (Code) related to the deduction for qualified tips. These final regulations are issued under the authority conferred by section 70201(h) of Public Law 119-21, 139 Stat. 72 (July 4, 2025), commonly known as the One, Big, Beautiful Bill Act (OBBBA), which requires that, not later than 90 days after the date of the enactment of the OBBBA, the Secretary of the Treasury or the Secretary's delegate (Secretary) publish a list of occupations that customarily and regularly received tips on or before December 31, 2024, for purposes of section 224(d)(1) of the Code. The regulations are also issued under the authority in section 224(d)(2)(C), which provides that “qualified tips” do not include any amount received by an individual unless such other requirements as may be established by the Secretary in regulations or other guidance are satisfied, and section 224(g) of the Code, which instructs the Secretary to prescribe such regulations or other guidance as may be necessary to prevent reclassification of income as qualified tips, including regulations or other guidance to prevent abuse of the deduction allowed by section 224. The final regulations are also issued under the authority of section 7805(a) of the Code, which authorizes the Secretary to prescribe all needful rules and regulations for the enforcement of the Code, including all rules and regulations as may be necessary by reason of any alteration of law in relation to Internal Revenue. Background This document contains amendments to 26 CFR part 1 under section 224 of the Code relating to the deduction from income for qualified tips. Under section 61(a) of the Code, amounts received by individuals as tips are included in gross income and subject to income tax. Treasury regulations under section 61 provide that “[w]ages, salaries . . . [and] tips . . . are income to the recipients unless excluded by law.” See § 1.61-2(a). 1 1  Under section 3121(q), tips are also considered wages for Federal Insurance Contributions Act (FICA) purposes. However, the deduction under section 224 does not apply for FICA purposes and is not taken into account in determining wages subject to FICA tax. Similarly, the deduction under section 224 does not apply for Self-Employment Contributions Act (SECA) purposes and is not taken into account for purposes of determining net earnings subject to SECA tax. Section 63(a) of the Code defines taxable income for taxpayers who itemize their deductions as gross income minus allowable deductions (other than the standard deduction). Section 63(b) provides that, in the case of an individual who does not elect to itemize deductions for the taxable year, taxable income means adjusted gross income reduced by the standard deduction and certain other enumerated deductions. Section 70201(a) of the OBBBA added new section 224 to the Code providing an income tax deduction for “qualified tips” that are received during the taxable year by individuals in an occupation that customarily and regularly received tips on or before December 31, 2024. Section 70201(b) of the OBBBA added the deduction provided by section 224 to the list of deductions used to determine taxable income in section 63(b). Specifically, section 224(a) provides for a deduction in an amount equal to the qualified tips received by an individual in a taxable year that are included on statements  2 furnished to the individual pursuant to section 6041(d)(3), section 6041A(e)(3), section 6050W(f)(2), or section 6051(a)(18) of the Code, or are reported by the taxpayer on Form 4137, Social Security and Medicare Tax on Unreported Tip Income (or successor). Section 224(b)(1) limits this deduction to an amount not to exceed $25,000 in a taxable year. Section 224(b)(2) further limits the amount of the deduction based on a taxpayer's modified adjusted gross income, which is a taxpayer's adjusted gross income for the taxable year increased by any amount excluded from gross income under section 911, section 931, or section 933 of the Code. The deduction phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers). 2  The House Budget Committee report on the OBBBA, H. Rept. 119-106, at 1503 (2025), specifies that the qualified tip amounts included on reporting statements (for example, Form 1099) must be separately accounted for on the statements. Section 224(c) provides that, in the case of qualified tips received by an individual during any taxable year in the course of a trade or business (other than the trade or business of performing services as an employee) of such individual, such qualified tips are taken into account under section 224(a) only to the extent that the gross income for the taxpayer from such trade or business for such taxable year (including such qualified tips) exceeds the sum of the deductions allocable to the trade or business in which such qualified tips are received by the individual for such taxable year. Section 224(d)(1) defines “qualified tips” as cash tips received by an individual in an occupation that customarily and regularly received tips on or before December 31, 2024, as provided by the Secretary. Section 224(d)(2) further requires that qualified tips not include any amount received by an individual unless the amount: • Is paid voluntarily without any consequence in the event of nonpayment, is not the subject of negotiation, and is determined by the payor; • Is not received in the course of a trade or business that is a specified service trade or business as defined in section 199A(d)(2) of the Code; and • Satisfies such other requirements as may be established by the Secretary in regulations or other guidance. Section 224(d)(2) further provides that, for purposes of determining whether amounts are received in the course of a trade or business that is a specified service trade or business as defined in section 199A(d)(2), in the case of an individual receiving tips in the trade or business of performing services as an employee, such individual is treated as receiving tips in the course of a trade or business which is a specified service trade or business if the trade or business of the employer is a specified service trade or business. Section 224(d)(3) provides that for purposes of section 224(d)(1), the term “cash tips” includes tips received from customers that are paid in cash or charged and, in the case of an employee, tips received under any tip-sharing arrangement. Section 224(e) provides that no deduction is allowed under section 224 unless the taxpayer includes on the return of tax for the taxable year such individual's Social Security number (SSN) as defined in section 24(h)(7) of the Code. Section 224(f) provides that if the taxpayer is a married individual (within the meaning of section 7703 of the Code), section 224 applies only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. That is, the deduction is not available for a taxpayer who is married and files separately. Section 224(h) provides that no deduction is allowed under section 224 for any taxable year beginning after December 31, 2028. Section 70201(h) of the OBBBA instructs the Secretary to publish a list of occupations that customarily and regularly received tips on or before December 31, 2024, (“List of Occupations that Receive Tips”) for purposes of section 224(d)(1) no later than 90 days after the date the OBBBA was enacted (July 4, 2025). The Council of Economic Advisors (CEA) released a report in June 2025, entitled “The One Big Beautiful Bill: Legislation for Historic Prosperity and Deficit Reduction,” that estimates the economic effects and fiscal impacts of OBBBA. In this report CEA estimates that the no tax on tips provision of OBBBA will increase average take-home pay for tipped workers by $1,300 per year. CEA also estimates that the provisions for no tax on overtime, no tax on tips, and senior tax relief will boost Gross Domestic Product by 0.3 to 0.4 percent while they are in effect and the growth that they generate will yield $54 to $73 billion in higher revenue to offset the direct revenue losses attributable to these provisions. A notice of proposed rulemaking and a notice of public hearing (REG-110032-25) were published in the Federal Register (90 FR 45340) on September 22, 2025, proposing regulations under section 224 that identify occupations that customarily and regularly received tips on or before December 31, 2024, and that provide a definition of “qualified tips” for purposes of the income tax deduction for qualified tips under section 224. A public hearing was held telephonically on October 23, 2025, and comments responding to the notice of proposed rulemaking were received. On November 5, 2025, the Treasury Department and the IRS released Notice 2025-62, providing penalty relief for certain 2025 information reporting related to the section 224 deduction for qualified tips. In addition, Notice 2025-69, released on November 21, 2025, provides guidance regarding how individuals satisfy the requirements for the section 224 deduction for qualified tips received in 2025. Notice 2025-69 also provides transition relief for taxpayers regarding the requirement that qualified tips must not be received in the course of a specified service trade or business. Summary of Comments and Explanation of Revisions This Summary of Comments and Explanation of Revisions summarizes the proposed regulations, all the substantive comments submitted in response to the proposed regulations, and revisions adopted by these final regulations. The Treasury Department and the IRS received 322 written comments in response to the proposed regulations. The comments are available for public inspection at https://www.regulations.gov or upon request. After full consideration of the comments received, these final regulations adopt the proposed regulations with modifications in response to such comments as described in this Summary of Comments and Explanation of Revisions. Many of the comments received were unrelated to tax law or otherwise outside the scope of the proposed regulations. Comments expressing general approval or disapproval of section 224 or the OBBBA, recommending statutory revisions, and addressing issues that are outside the scope of this rulemaking (such as comments relating to IRS forms, reporting procedures, and enforcement) are generally not addressed in this Summary of Comments and Explanation of Revisions section or adopted in these final regulations. Guidance on claiming the deduction for 2025 was provided in Notice 2025-69, and additional guidance on information reporting and claiming the deduction in subsequent years will also be provided in the instructions to the relevant forms. Some commenters requested a public hearing or requested to speak at the public hearing, which was held telephonically on October 23, 2025. Other commenters requested that the comment period be extended for at least another 30 days. To ensure that these final regulations are issued in time to provide guidance to taxpayers filing their 2025 income tax returns, the Treasury Department and the IRS did not extend the comment period, and the comment period for the proposed regulations ended on October 22, 2025; however, the Treasury Department and the IRS considered all comments received, including comments submitted after the close of the comment period that were received up to the point in the rulemaking process at which revisions to the regulatory text could no longer practicably be made. Comments received after that point could not be fully evaluated or incorporated due to the advanced stage of the drafting process. In addition to making modifications in response to the comments received, the final regulations also include non-substantive grammatical or stylistic changes to the proposed regulations. 1. Comments on the Methodology Used To Construct the List of Occupations That Receive Tips Table 1 in § 1.224-1(f) of the proposed regulations contains the proposed list of occupations that customarily and regularly received tips (List of Occupations that Receive Tips) on or before December 31, 2024, that section 70201(h) of the OBBBA instructed the Secretary to provide. The Treasury Department and the IRS compiled the proposed List of Occupations that Receive Tips based on a review of IRS data, legislative history, and survey data regarding tipped occupations and the presence of certain factors demonstrating that those occupations customarily and regularly received tips. Because the Code does not define the phrase “customarily and regularly,” the Treasury Department and the IRS looked to dictionary definitions and other statutory provisions, including the provisions of the Fair Labor Standards Act (FLSA), for guidance. With these parameters in mind, the Treasury Department and the IRS reviewed data collected from 2023 Forms W-2, Wage and Tax Statement, 3 that reported tips in box 7 on the form (Social Security tips); Forms 4137 that reported tips on line 4; and corresponding income tax returns (Forms 1040). The Treasury Department and the IRS identified occupations listed on the income tax returns (as reported on page 2 of Form 1040 next to the taxpayer's signature) described in the prior sentence as having customarily and regularly received tips based on the percentage of taxpayers who reported at least $100 in annual tip income within a given occupation as reported on Form 1040. 3  Section 224(d)(1) specifies that the occupation must have customarily and regularly received tips on or before December 31, 2024. The Treasury Department and the IRS reviewed data for the 2023 tax year because that was the most recent year for which comprehensive income tax return data was available. The Treasury Department and the IRS compared the 2023 tax year data to similar data for 2017-2022. Because 2023 data was similar to prior year data, the Treasury Department and the IRS reviewed preliminary data for the 2024 tax year and anticipated that final 2024 data would be substantially similar to 2023 data. To account for limitations in this data, including the fact that the data pool consisted only of individuals working as employees and relied on self-reported and non-standardized occupation descriptions, the Treasury Department and the IRS also evaluated occupations identified in the Gaming Industry Tip Compliance Agreement (GITCA) program, a voluntary tip reporting program for the gaming industry run by the IRS, and other similar IRS tip reporting programs. The Treasury Department and the IRS also consulted the House Budget Committee report on the OBBBA, H. Rept. 119-106, at 1502 (2025), for additional information regarding occupations that traditionally and customarily received tips on or before December 31, 2024. Finally, the Treasury Department and the IRS analyzed survey data from the Panel Study of Income Dynamics (PSID) that included information on occupations and tip income of both employees and self-employed individuals. The PSID is a nationally representative survey conducted by the University of Michigan. In organizing the proposed List of Occupations that Receive Tips, the Treasury Department and the IRS created a new categorization system based on the 2018 Standard Occupation Classification (SOC Code) system, called the Treasury Tipped Occupation Code (TTOC) system. The SOC Code system is a Federal statistical standard used by Federal agencies to classify workers into occupational categories for the purpose of collecting, calculating, or disseminating data. It is published by the Executive Office of the President, Office of Management and Budget (OMB). Many commenters addressed the methodology used to create the proposed List of Occupations that Receive Tips. One commenter suggested that the IRS review public comments submitted in response to the Bureau of Labor Statistics' Notice of solicitation of comments to revise the SOC for 2028 (BLS-2024-0001), published in the Federal Register on June 12, 2024 (89 FR 49911), when considering other occupations to add to the list. Another commenter suggested that the primary source used to create the list, occupations reported on an income tax return, does not reflect any historical or traditional information about tipped occupations. One commenter noted that many of the occupations on the list, especially those that do not have regular interaction with the public like cooks, dishwashers, and prep cooks, are not historically known to receive tips. One commenter suggested that the Treasury Department and the IRS narrow the list by focusing on the frequency or prevalence of tip income. The commenter noted that the definitions of customarily and regularly discussed in the proposed regulations were a “logical starting point,” but questioned whether these definitions were applied in the methodology beyond excluding workers reporting less than $100 in tips per year. The commenter questioned why a $100 annual threshold was selected instead of a $30/month threshold, which is used in the FLSA context. One commenter argued that the proposed standard of “more often than occasionally” conflicted with the $100 annual threshold. Several commenters noted that the proposed regulations do not explain how the additional sources, outside of income tax returns, were used to add occupations to the list and that the addition of certain occupations is not supported by data. Two commenters requested more transparency as to how the list was created, including providing transparent categorization standards, written job descriptions, and stated evidence thresholds for inclusion. Finally, a few commenters noted that eligibility in a particular occupation should be based on the nature and substance of the services provided in the occupation, rather than the context or industry in which they are provided and that the list should be revised to focus more on the nature of occupations rather than on the industry or type of service or product provided. One commenter stated that the occupations designated by the Treasury Department and the IRS as eligible for no taxes on tips appropriately captured traditional tipped occupations and requested that none of these occupations be cut from the final rule. Another commenter noted that the proposed List of Occupations that Receive Tips accurately reflects those intended by Congress to receive the tax deduction. Section 70201(h) of the OBBBA requires the Treasury Department and the IRS to publish a list of occupations that customarily and regularly received tips on or before December 31, 2024. This provision did not dictate a specific process for creating this list. In constructing a methodology for creating the proposed List of Occupations that Receive Tips, the Treasury Department and the IRS used traditional tools of statutory construction, including dictionary definitions, to clarify what it means for an occupation to customarily and regularly receive tips. In compiling the proposed list, the Treasury Department and the IRS needed a source of occupational data from which to select those occupations that customarily and regularly received tips on or before December 31, 2024, to avoid relying solely on anecdotal information. The Treasury Department and the IRS utilized the best comprehensive data source available to them—occupations reported on 2023 Federal income tax returns, 4 the latest tax year for which complete information was available at the time the proposed regulations were published. The many different occupations that taxpayers identified on the “Your occupation” line on their income tax returns were analyzed based on the SOC Code associated with the occupation. The SOC Codes associated with income tax returns with accompanying 2023 Forms W-2, Wage and Tax Statement, and Forms 4137, Social Security and Medicare Tax on Unreported Tip Income, reporting more than $100 per year in tip income were identified and compiled into a preliminary list. For every SOC Code on this list, data on reported tips, including the percentage of individuals within that SOC Code who reported tips (on associated Forms W-2 and 4137), was determined. Thus, occupational data from income tax returns was calculated with respect to the related SOC Code, not necessarily for the occupation listed on the individual income tax return. Next, the Treasury Department and the IRS created the TTOC system for organizing the proposed List of Occupations that Receive Tips. This process sometimes involved combining or dividing certain SOC Codes to describe the occupations in a user-friendly manner and to remove non-tipped occupations that were included under the same SOC Code as tipped occupations. The proposed regulations identified some occupations as distinct categories, while other occupations were embedded in broader categories (for example, eyelash technicians, as discussed later, were included implicitly under TTOC 603 Barbers, Hairdressers, Hairstylists, or Cosmetologists or TTOC 606 Eyebrow Technicians). 4  The Treasury Department and the IRS reviewed preliminary data for the 2024 tax year and anticipated that final 2024 data would be substantially similar to 2023 data. As explained in the preamble to the proposed regulations and noted earlier, the proposed List of Occupations that Receive Tips and its related data on reported tips had limitations. Tipped occupations with a large proportion of individuals working in those occupations as independent contractors may have been underrepresented in the list, since the list only included employees reporting tips. 5 In addition, in certain cases, tipped occupations were grouped in the same SOC Code as non-tipped occupations, resulting in a lower percentage of individuals reporting tips for that SOC Code than for the occupation within the SOC Code that was the tipped occupation. 5  Only employees receive Forms W-2, which include separate tip reporting. Similarly, only employees report their tips using Form 4137. Independent contractors do not separately report tips on their income tax returns, and the information returns received by independent contractors prior to 2026, such as Forms 1099-MISC, did not separately report tips. Thus, no tax return information was available concerning tips received by independent contractors. Beginning in tax year 2026, information returns furnished to both independent contractors and employees will separately report certain tips. As described earlier, other information sources, including occupations identified in the GITCA program, the House Budget Committee report on the OBBBA, and the PSID, were consulted to help address some of the limitations of the list. However, many of these sources were not exhaustive lists of tipped occupations and others were based on data not as comprehensive and statistically significant as income tax return data. While the data and information the Treasury Department and the IRS used to develop the proposed List of Occupations that Receive Tips had limitations, it was and continues to be the best data available for this purpose. When compiling the List of Occupations that Receive Tips in the proposed and final regulations, the Treasury Department and the IRS reviewed preliminary data available for tax year 2024. This preliminary data was updated between the issuance of the proposed regulations and these final regulations, but in both cases it is substantially similar to the tax year 2023 data and did not alter the list. None of the commenters provided alternatives for reliable data sources, nor did they provide alternative methodologies for constructing the List of Occupations that Receive Tips. For these reasons, the Treasury Department and the IRS used the same methodology and data from the proposed regulations (including updated preliminary 2024 tax return information) to develop the List of Occupations that Receive Tips in the final regulations. In response to the comments received regarding occupations not specifically identified in the proposed list, the Treasury Department and the IRS reviewed the same available data at both the SOC Code level and the more granular level of the occupations listed on individual income tax returns. 6 Where the data supported a modification to the list, the Treasury Department and the IRS expanded or refined the list of occupations in the final regulations to more accurately identify occupations that customarily and regularly received tips on or before December 31, 2024. The specific comments requesting additional occupations and the changes made in response are described later in this preamble. 6  The Treasury Department and the IRS reviewed the data at the more granular level of occupations listed on individual income tax returns to verify that the SOC Code grouping did not exclude occupations based on inaccurate data. Concerning comments asking that the occupations on the List of Occupations that Receive Tips be based on the nature and substance of the services provided in the occupation rather than the context or industry in which they are provided, generally the names and descriptions of the occupations on the List of Occupations that Receive Tips are based on the nature of the service provided in that occupation. The groupings of the various occupations under industry-related headings like “Beverage and Food Service” is solely for purposes of organizing the list. However, in a few situations the industry context in which an occupation operates changes the nature of the occupation in comparison to other industrial contexts to such an extent that it becomes a separate occupation. For instance, “desk clerks” in the hospitality industry provide a range of very specific services to hotel, motel, and resort guests such that it is a distinct occupation from desk clerks in other industry contexts. Some commenters expressed concern that several of the occupations on the list are not considered occupations in which employees “customarily and regularly” receive tips under the FLSA. These commenters were concerned that the inconsistencies might cause confusion. One commenter asked for more clarification as to how the List of Occupations that Receive Tips interacts with FLSA rules. As the Treasury Department and IRS explained in the preamble to the proposed regulations, the FLSA uses the phrase “customarily and regularly” in relation to the FLSA tip credit. 7 The FLSA defines a “tipped employee” for whom an employer may take a tip credit as “any employee engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. 203(t). The FLSA further provides that when an employer takes an FLSA tip credit for a tipped employee, the tipped employee must retain all of the tips the employee receives, except that this requirement “shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips.” 29 U.S.C. 203(m)(2)(A). 8 United States Department of Labor (DOL) regulations provide, in part, that “[t]he phrase `customarily and regularly' signifies a frequency which must be greater than occasional, but which may be less than constant.” 29 CFR 531.57. 9 DOL guidance also addresses specific occupations in which employees customarily and regularly receive tips within the meaning of the FLSA. For instance, DOL guidance interpreting the FLSA states that servers, counter personnel who serve customers, bellhops, bussers (that is, server helpers), and service bartenders are examples of occupations that “customarily and regularly receive tips” for purposes of the FLSA. 10 The occupations DOL has identified as occupations in which employees customarily and regularly receive tips in its guidance are not meant to be exhaustive and do not control for purposes of section 224 of the Code. 7   See 90 FR at 45344. Under the FLSA, so long as certain criteria are satisfied, employers can take a tip credit to bring a tipped employee's total wages up to the Federal minimum wage amount. See 29 U.S.C. 203(m)(2)(A)(i)-(ii). Currently, the federal minimum wage is $7.25 per hour, and the maximum tip credit amount is $5.12. 8  The FLSA's tip credit has several components, including that an employee must be in an occupation in which the employee customarily and regularly receives at least a certain amount per month in tips (more than $30), retains all tips (except for a pool limited to employees who customarily and regularly receive tips), receives other direct wages, and receives advance notice to qualify as a “tipped employee” for whom an employer may take a tip credit against its minimum wage obligations. See 29 U.S.C. 203(m)(2)(A), (t). 9  The regulations also provide that “if an employee is in an occupation in which he normally and recurrently receives more than $30 a month in tips, he will be considered a tipped employee even though occasionally because of sickness, vacation, seasonal fluctuations or the like, he fails to receive more than $30 in tips in a particular month.” 29 CFR 531.57. 10   See DOL Field Operation Handbook, § 30d08. Retrieved December 18, 2025, from https://www.dol.gov/agencies/whd/field-operations-handbook; see also WHD Opinion Letter FLSA2025-03 (Sept. 30, 2025); WHD Opinion Letter FLSA2009-12 (Jan. 15, 2009); WHD Opinion Letter FLSA2008-18 (Dec. 19, 2008); and WHD Opinion Letter FLSA-858 (June 28, 1985) (concluding that barbacks, itamae-sushi and teppanyaki chefs, and a “wine-server/captain-host,” respectively, could be included in a tip pool with tipped employees for whom the employer took a tip credit). There are many differences between the specific language, purpose, and history of the FLSA tip provisions versus the language, purpose, and history of the deduction for qualified tips under section 224 of the Code. Among other things, while the text of the FLSA is expressly limited to occupations in which an employee receives “more than $30 a month in tips,” section 224 contains no such limitation, and the Treasury Department and IRS have not utilized this threshold for purposes of limiting the List of Occupations that Receive Tips. In addition, while the FLSA contemplates that an employee must have some level of customer interaction to “customarily and regularly” receive tips, 11 section 224(d)(3) provides that for purposes of the deduction for qualified tips under section 224, cash tips include, in the case of an employee, tips received through a tip sharing arrangement. Accordingly, the Treasury Department and IRS included in the proposed List of Occupations that Receive Tips some occupations that may not have extensive, or any, customer interaction, and in which employees have not been considered to customarily and regularly receive tips under the FLSA, including dishwashers and cooks. The final regulations take the same approach. 11   See Montano v. Montrose Rest. Assocs., 800 F.3d 186, 189-194 (5th Cir. 2015) (holding that a factfinder could determine that an employee did not “customarily and regularly receive tips,” despite the fact that the employer included him in a tip pool). In addition to the differences discussed above, section 224 and the FLSA serve different purposes. The purpose of section 224 is to provide a deduction for individuals who receive tips, while the FLSA, in relevant part, governs the conditions under which employers may take a credit towards their wage obligations for employees who receive tips. Given that section 224 of the Code and the FLSA tip provisions are entirely different statutory provisions with different histories and purposes, the inclusion of occupations as tipped occupations under section 224 has no bearing or effect on what occupations are considered tipped for purposes of the FLSA and any differences should not be a source of confusion. Commenters also asked how the IRS will determine whether a particular taxpayer's occupation is on the List of Occupations that Receive Tips in the regulations when it is not listed as an illustrative example. One commenter asked that the IRS provide transparency as to how the IRS intends to interpret whether an occupation is on the List of Occupations that Receive Tips. Taxpayers wishing to claim the deduction and entities responsible for information reporting are primarily responsible for ensuring their occupation is on the List of Occupations that Receive Tips. The list, in most instances, is sufficiently specific to provide clarity. The IRS intends to interpret the occupations on the list in a fair and impartial manner consistent with their commonly understood meaning. Several commenters asked that the List of Occupations that Receive Tips be a non-exhaustive one (one commenter stating that an exclusive list was not supported by statute). One commenter suggested instituting a safe harbor provision for claiming deductions for non-listed occupations and setting up a semi-annual review process for adding new occupations to the list. Another commenter suggested listing the occupations in a revenue procedure and updating the revenue procedure with additional occupations based on more current data, if necessary. Because section 224(d)(1) provides that “[t]he term 'qualified tips' means cash tips received by an individual in an occupation which customarily and regularly received tips on or before December 31, 2024, as provided by the Secretary,” only tips received in an occupation that is on the List of Occupations that Receive Tips “provided by the Secretary” are qualified tips. In addition, the statutory language does not contemplate an evolving or updated List of Occupations that Receive Tips but rather describes one list of occupations that customarily and regularly received tips at a specific point in time—on or before December 31, 2024. Through the notice of proposed rulemaking notice and comment process, interested parties were provided the opportunity to suggest additions and other edits to the List of Occupations that Receive Tips in the proposed regulations. As discussed later, the Treasury Department and the IRS made several revisions in response to the comments. However, the statute requires that the Secretary provide a comprehensive list as of a fixed point in time. For this reason, the final regulations contain the requirement from the proposed regulations that only qualified tips received in connection with the occupations on the List of Occupations that Receive Tips are eligible for the deduction in section 224(a). However, note that while the List of Occupations that Receive Tips is exhaustive, the illustrative examples of occupations that fit within each TTOC are not. There may be other occupations that fall within a TTOC that are not listed as an illustrative example. 2. Comments Concerning the List of Occupations That Receive Tips Several commenters indicated their support for specific occupations included on the proposed List of Occupations that Receive Tips, including occupations in the beauty industry, app-based delivery drivers, and digital content creators. Many commenters requested that additional occupations be added to the List of Occupations that Receive Tips. Several of the requested additions were for occupations that were already included in the proposed List of Occupations that Receive Tips, either as their own category or specifically mentioned as an illustrative example in an existing category, such as pet groomers, digital content creators, dancers, boat workers, pool cleaners and yoga instructors. Those occupations remain on the final list. A. Comments Requesting Additional Details or Clarification for Occupations Already on the List of Occupations That Receive Tips Some commenters requested that additional occupations be included as illustrative examples in the categories in which they belong. The illustrative examples were provided to assist taxpayers, but they are not an exhaustive list of every occupation that fits under a TTOC occupation category. For example, under the TTOC for Travel Guides (705), cruise director and river expedition guide are listed as illustrative examples. But other travel guides, such as a hiking guide or urban ghost tour guide, would also be included in this TTOC, even though they are not listed as illustrative examples. One commenter asked about including “table game supervisors” in casinos on the List of Occupations that Receive Tips. The SOC Code for “First-Line Supervisors of Gambling Service Workers” (39-1013), whose duties can include planning and organizing activities and services for guests in hotels and casinos, was included in the proposed List of Occupations that Receive Tips under TTOC 201, Gambling Dealers, and continues to be included under this category in the final regulations. Thus, table game supervisors are covered by the Gambling Dealers category. One commenter requested that residential building staff, such as doormen, be added to the list. Most residential building staff are covered by the categories in the proposed List of Occupations that Receive Tips. For example, if a residential building has a concierge, they are already included in the “Concierges” category (TTOC 302). Residential building maintenance workers fit under the “Home Maintenance and Repair Workers” (TTOC 401). And finally, doormen fit as part of the “Baggage Porters and Bellhops” (TTOC 301). However, to clarify that this category can include workers who do not work in a hotel or motel, “doorman” has been added to the list of illustrative examples for this category in the final regulations. Another commenter asked that eyelash technicians be added to the List of Occupations that Receive Tips. The proposed List of Occupations that Receive Tips included “Eyebrow Threading and Waxing Technicians” (TTOC 606). For clarity, in the final regulations this category is revised to read “Eyebrow and Eyelash Technicians,” and additions were made to the description to include eyelash technicians. One commenter asked that a winery tasting room server be added to the List of Occupations that Receive Tips. The proposed List of Occupations that Receive Tips included “Food Servers, Non-restaurant” (TTOC 103), and a winery tasting room server is covered by this category. The final regulations clarify this by amending the category name to “Food and Beverage Servers, Non-restaurant” (newly added language shown in italics). One commenter asked that the phrase “over established routes or within an established territory” be removed from the description of “Goods Delivery People” (TTOC 804) to clarify that app-based delivery workers (also called gig economy delivery drivers) are covered by that category. The proposed illustrative examples focused on the service being performed ( e.g., pizza delivery, package delivery) rather than the method through which the service was requested. The Treasury Department and the IRS agree that adding “app/platform based delivery person” to the illustrative list would be helpful. The final regulations include this clarification in both “Goods Delivery People” (TTOC 804) and “Taxi and Rideshare Drivers and Chauffeurs” (TTOC 802). In addition, the phrase “over established routes or within an established territory” has been removed from the description of “Goods Delivery People” in the final regulations. One commenter asked that more detail be provided for the various occupations in the “Recreation and Instruction” grouping to encompass the full range of outdoor recreation guiding and instructional activities, and more specifically that “Tour Guides” and “Travel Guides” expressly include outdoor, wilderness, and expedition guiding services. Although outdoor recreation occupations are addressed in “Travel Guides” (TTOC 705) (river expedition guide is listed as an illustrative example), the Treasury Department and the IRS agree that additional detail would be helpful, and the final regulations include a parenthetical noting that both indoor and outdoor locations are covered. Another commenter requested that banquet wait staff be added to the List of Occupations that Receive Tips. The proposed regulations included the “Wait Staff” (TTOC 102) category. The Treasury Department and the IRS agree that additional detail would be helpful to confirm that banquet wait staff are covered by this category. The final regulations add “banquet staff” as an illustrative example, and the description is amended to read, “Take orders and serve food and beverages to patrons in dining establishments or at catered events” (newly added language shown in italics). One commenter asked whether people who dress as Santa Claus for parties are in an occupation that customarily and regularly received tips on or before December 31, 2024. Individuals dressed up as Santa Claus, as well as other characters or celebrities, are covered by the “Entertainers and Performers” (TTOC 208) category. Another commenter asked that self-enrichment and self-improvement instructors, such as intuition coaches, energy practitioners (including Reiki and Energy Psychology practitioners), and meditation instructors be included on the List of Occupations that Receive Tips. Although these specific occupations were not identified in the proposed regulations, depending on the nature of the instruction provided and the facts and circumstances of each particular situation, these instructors could be covered under “Self-Enrichment Teachers” (TTOC 702), if their instruction is for the primary purpose of self-enrichment, rather than for an occupational objective, educational attainment, competition; or fitness; “Sports and Recreation Instructors” (TTOC 706), if they are teaching or instructing individuals or groups for the primary purpose of recreation, rather than for an occupational objective, educational attainment, competition, or fitness; or “Exercise Trainers and Group Fitness Instructors” (TTOC 608), if they are instructing or coaching groups or individuals in exercise activities for the primary purpose of personal fitness. One commenter requested that senior living and resident care service providers be included in the List of Occupations that Receive Tips. The proposed regulations would have included the category of “Personal Care and Service Workers” (TTOC 501). To clarify that resident care is also included in this occupation category, the description in the final regulations provides that “work is performed in various settings depending on the needs of the care recipient and may include locations such as their home, place of work, out in the community, at a daytime nonresidential facility or a residential facility” (newly added language shown in italics). Another commenter asked that the illustrative examples name all beauty-sector occupations including estheticians and apprentices and assistants. As discussed previously, the illustrative examples are a non-exhaustive list of occupations. In addition, the final regulations clarify that apprentices and assistants qualify under the applicable TTOC occupation category if they perform the same services as those listed in the TTOC occupation description. Finally, a commenter noted that the proposed category of “Pet Caretaker” (TTOC 506) would exclude individuals who provide care to horses because horses are considered livestock in certain legal contexts. This commenter stated that certain tasks involved in the care of horses, including grooming and exercising, are similar to the tasks included in the description of pet caretakers. In response to this comment, the final regulations include the category of “Pet and Show Animal Caretaker” (TTOC 506). In addition, “horse groomer” has been added to the list of illustrative examples for this occupation category. B. Comments Suggesting New Occupations Be Added to the List of Occupations That Receive Tips In evaluating comments suggesting new occupations for inclusion on the List of Occupations that Receive Tips, the Treasury Department and the IRS consulted the same data sources as in preparing the proposed List of Occupations that Receive Tips in the proposed regulations (the 2023 income tax return data, the preliminary data available for tax year 2024, IRS voluntary tip reporting program data, legislative history and survey data regarding tipped occupations), as well as the updated preliminary data available for tax year 2024. The Treasury Department and the IRS examined the data for the suggested new occupations at the more granular level of the occupations listed on individual income tax returns, in addition to looking at the SOC Codes of the suggested new occupations. This examination of the data is the basis for responding to the following comments. 12 12  Given the wide variation of terms used to characterize occupations on income tax returns, it was not feasible to examine every occupation in this way. For this reason, this examination was conducted only for occupations that commenters suggested were missing from the list of tipped occupations in the proposed regulations. One commenter requested that “florists” be included on the List of Occupations that Receive Tips. The proposed regulations would have included event florist as an illustrative example of “Private Event Planners” (TTOC 502), and the SOC Code for Floral Designers, 27-1023, would have been included as one of the related SOC Code for TTOC 502. Similarly, the proposed regulations would have included floral delivery persons as an illustrative example of “Goods Delivery People” (TTOC 804). In response to this comment, the Treasury Department and the IRS reviewed the available data again, this time examining the data for occupations listed on individual income tax returns that were related to florists, in addition to looking at data for florist-related SOC Codes. The Treasury Department and the IRS determined that the data for florist-related occupations listed on individual income tax returns supports adding a new TTOC for “Floral Designers” (TTOC 510), which encompasses a wider variety of floral workers. “Event florist” was removed as an illustrative example from “Private Event Planners” and added to the new “Floral Designers” category, and the related SOC Code, 27-1023, was also moved from “Private Event Planner” to the new “Floral Designers” category. Another commenter asked that artists and artisans be added to the List of Occupations that Receive Tips. The proposed regulations did not separately identify artists as an occupation that customarily and regularly received tips on or before December 31, 2024. However, individuals who may be described as artists appeared in multiple occupation classifications, and the proposed regulations would have included certain performing artists on the List of Occupations that Receive Tips. For example, both dancers and musicians would have been included (TTOC 205 and 206). In response to this comment, the Treasury Department and the IRS reviewed the same data sources described in the proposed regulations, examining the data for occupations listed on individual income tax returns that were related to artists, distinct from occupations such as dancers and musicians, in addition to looking at data for artist-related SOC Codes. The Treasury Department and the IRS determined that the data for artist-related occupations listed on individual income tax returns supports the conclusion that a visual artist is also an occupation that customarily and regularly received tips on or before December 31, 2024. The final regulations include the new category of “Visual Artists (TTOC 509)” This category includes individuals who create original visual artwork using any of a wide variety of media and techniques. Examples of this category include ice sculptor and caricature sketch artist. Tip-related income tax return data for the occupation “artisan” did not support adding this occupation category as a separate TTOC. However, the terms “artist” and “artisan” are similar in meaning and it is possible that many individuals who perform services as an artisan might also be considered as performing services as an artist, depending on the particular facts and circumstances. One commenter suggested that gas station attendants who pump gas for customers where they are required to do so by State law should be included on the List of Occupations that Receive Tips. The Treasury Department and the IRS reviewed tip-related income tax return data for gas pump attendants located in New Jersey and Oregon, the two States that currently prohibit customers from pumping their