Tipped Employees and Overtime Workers

Workers who rely on tips or overtime pay could see substantial benefits under the new law.

Eligible taxpayers may deduct up to:

• $25,000 for married couples filing jointly
• $12,500 for eligible single filers

These new deductions apply to qualifying tip income and overtime pay, reducing taxable income and potentially increasing refunds for service industry workers, healthcare employees, and others who routinely earn overtime.

For many working households, this provision alone could translate into hundreds—or even thousands—of dollars in additional tax savings.