Casino workers in the U.S. are poised to benefit from a new policy regarding tips.
A proposed policy by the Internal Revenue Service that is expected to be published later this month will allow casino workers in the U.S. to deduct taxes for tips received through “tangible or intangible tokens that are readily exchangeable for a fixed amount in cash.”
The tangible or intangible tokens include casino chips.
The policy derives from the One Big Beautiful Bill Act (OBBBA) signed in July by President Donald Trump. Last year, Trump proposed the No Tax on Tips provision.
Workforces will be allowed to implement the No Tax on Tips rule when filing their taxes in 2026. Under the policy, employees are allowed to deduct up to $25,000 in tips from their taxable income in a given year. The policy has an earnings requirement that states “the deduction phases out for taxpayers with modified adjusted gross income over $150,000.”
Workers included in No Tax on Tips provision
The policy applies to casino chips but also allows employees who regularly receive tips to deduct taxes for tips received in cash, by check, gift card, electronic payment and debit or credit cards. The policy doesn’t apply to tips paid in any medium other than cash or charge, including meals, services or tickets. Under the OBBBA, occupations that regularly receive tips and that can benefit from the No Tax on Tips provision include bartenders, servers, gambling dealers, booth cashiers, gambling cage workers, dancers, singers and DJs.
Home repair workers, tutors, hair stylists, pet caretakers, golf caddies, travel guides, valet drivers and fitness trainers are also deemed regulator tip receivers under the OBBBA.
Workers also benefit from the policy through the consideration of Tip Rate Determination Agreements and Gaming Industry Tip Compliance Agreements. The pacts are offered by the IRS and don’t require workers to track individual tips by leveraging a set rate for reporting purposes. Tips received under the agreements are included in No Tax on Tips.
The policy, which will have a public hearing on Oct. 23, expires at the end of 2028.
