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Surprising Jobs Exempt from Tax on Tips Under New US Law – Including Influencers and Podcasters

Ca.finance.yahoo.com2 min read94 views
Surprising Jobs Exempt from Tax on Tips Under New US Law – Including Influencers and Podcasters

Unexpected Occupations Covered Under Trump's 'No Tax on Tips' Plan

In a recent development from Washington, the Trump administration has released a preliminary list of occupations that will not be required to pay federal income tax on their tips as part of the new tax cuts and spending bill signed into law in July. This temporary provision, effective from 2025 to 2028, applies to workers earning less than $160,000 annually in 2025.

Key Details of the Provision

The law aims to eliminate income taxes on tips for jobs that traditionally receive them, impacting an estimated 4 million workers or about 2.5% of all jobs in the U.S., according to the Yale Budget Lab. The Treasury Department was mandated to publish a qualifying occupations list within 90 days of the bill's signing, which is now available on their website.

Categories of Exempt Occupations

The list is organized into eight broad categories:

  • Beverage and Food Service: Includes roles like sommeliers, cocktail waiters, pastry chefs, and cake bakers.
  • Entertainment and Events: Covers bingo workers, club dancers, DJs, clowns, streamers, and online video creators.
  • Hospitality and Guest Services: Encompasses ushers and maids.
  • Home Services: Involves gardeners, electricians, and house cleaners.
  • Personal Services: Includes wedding planners and personal care aides.
  • Personal Appearance and Wellness: Covers massage therapists, yoga instructors, and cobblers.
  • Recreation and Instruction: Features skydiving pilots, ski instructors, tutors, and au pairs.
  • Transportation and Delivery: Includes tow truck drivers, parking garage attendants, delivery drivers, and movers.

Surprising Inclusions

Among the more unexpected jobs on the list are podcasters and social media influencers, highlighting how the definition of tipped occupations is evolving with modern gig economy trends. Other notable exemptions include golf caddies, blackjack dealers, and house painters.

Economic Impact and Estimates

A report from the Yale Budget Lab, authored by Ernie Tedeschi, indicates that the direct effects of this law might be limited, as over 37% of tipped workers had incomes low enough to avoid federal income tax in 2022. However, behavioral changes, such as increased participation in tipped work, could raise the overall cost. Congressional budget analysts project the provision will increase the deficit by $40 billion through 2028, with the Joint Committee on Taxation estimating a $32 billion cost over 10 years.

  • #tax-exempt-tips
  • #trump-administration
  • #gig-economy
  • #influencer-jobs
  • #us-tax-law

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