Over 230,000 hospitality workers in Missouri will see a big change when they file taxes this year. Stacy Engle with the IRS told Missourinet that the “No Tax on Tips” provision was part of the One Big Beautiful Bill signed into law in July — and it’s retroactive for all of 2025.
“Anyone that is an eligible worker that normally receives tips and there is a list on irs.gov. Those eligible tips can be deducted from income for those people up to $25,000,” said Engle.
Engle told Missourinet that workers should coordinate with their employers to confirm their actual tip amounts, since W-2 forms are still being updated.
“Because of the amount of time the IRS had to adjust the W2’s, the W2’s have not been edited,” said Engle. “What eligible workers will have to do is they will have to work with their employers and determine what their actual tips are.”
Engle said the no tax on tips includes all tips.
“Either tips they made in cash or tips by credit card or check or what they call it tip pool, so everyone needs to keep really good records,” said Engle. “Try to figure out which were actually tips from which we’re actually wages because you’re going to get a better deduction if they were tips.”
Engle says more information is available on IRS.gov.
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