Tipped occupations ยท Hospitality and Guest Services
Hotel Staff Tips and the 2026 Tips Deduction: Codes 301 to 304
Four occupations in the Hospitality and Guest Services category of the final regulations (T.D. 10044) cover the hotel: baggage porters and bellhops (code 301), concierges (code 302), hotel, motel, and resort desk clerks (code 303), and maids and housekeeping cleaners (code 304). Hotel staff are employees, so reported tips reach Box 12 of the W-2 with code TP and the worker's occupation code in Box 14b, and up to $25,000 of qualified tips per return is deductible on Schedule 1-A for tax years 2025 through 2028. Hotel work also produces two of the IRS's own service charge examples: the room service charge and the contracted luggage assistance charge are named in IRS Topic No. 761 as charges, not tips, and the bell staff case below turns on exactly that line.
Last reviewed: November 4, 2026.
The facts, in one table
| Treasury Tipped Occupation Codes | 301, Baggage Porters and Bellhops; 302, Concierges; 303, Hotel, Motel, and Resort Desk Clerks; 304, Maids and Housekeeping Cleaners |
|---|---|
| Category in the final regulations | Hospitality and Guest Services |
| Related codes on the same property | 102 and 103, the wait staff and non-restaurant servers in the restaurants and banquet rooms; 801, Parking and Valet Attendants, at the garage and the front drive |
| Also inside code 301 | Doormen, at hotels and elsewhere. The final regulations add 'doorman' to the examples for Baggage Porters and Bellhops, and state that a doorman at a residential building fits this category as well (T.D. 10044) |
| The deduction | Up to $25,000 of qualified tips per return, for tax years 2025 through 2028, claimed on Schedule 1-A whether or not you itemize |
| Phaseout | The amount after the $25,000 limit is reduced by $100 for each $1,000 of modified adjusted gross income over $150,000, or $300,000 on a joint return, counting whole $1,000 steps only (section 224(b)(2) of the Internal Revenue Code; 26 CFR 1.224-1(b)(2)) |
| Where the figure appears | Box 12 of your W-2, code TP, with your occupation code in Box 14b. For 2026 the deduction is generally limited to the amount the employer separately reported |
| Payroll tax | Unchanged. Tips are wages for Social Security and Medicare tax in full; the deduction reduces income tax only |
Read the code the way the site reads the whole list: appearing on the Treasury list is a published fact about an occupation. It is not a decision about any one worker, and the rest of the rules on this page, the reporting rule in particular, decide what a deduction is built from. The full list of 71 codes is on the Treasury Tipped Occupation Codes page.
the room service charge is not a tip
How a hotel worker's tips reach the tax record
The route is the employee route for all four occupations. Cash tips of $20 or more in a calendar month are reported to the employer by the tenth day of the following month (IRS Topic No. 761), and the reported total is what the hotel prints in Box 12 code TP. The definition of cash tips the IRS uses covers the ways hotel tips actually arrive: tips received directly from customers, tips from other employees under any tip-sharing arrangement, and charged tips, which in a hotel includes tips charged to the room and distributed by the property.
The tips arise differently by role, and the reporting duty follows the money rather than the job title. A bellhop's tips are mostly cash at the door and the elevator. A concierge's are cash for arrangements made. A housekeeper's are very often cash left in the room, which no register records: if that cash is not reported to the hotel, it is not in code TP, and the deduction for 2026 is generally limited to the reported figure. Desk clerks receive fewer tips than the other three roles, but the list gives the occupation its own code all the same. Tips you never reported to the employer are a separate case from a misprinted W-2: the IRS states that qualified tips you report yourself on Form 4137 can be used to determine the deduction.
If the code TP figure on your January W-2 does not match the tips you reported, the missing codes page sets out the common causes and the order of fixes. Only your employer can correct the form, on Form W-2c.
What counts as a qualified tip for hotel staff
A qualified tip is a voluntary payment, in an amount the customer decides, received in an occupation on the Treasury list. Sorted by the IRS definitions, the cases the hotel actually produces are these:
- Cash from a guest: per bag at the door, for a table or tickets arranged, left in the room for housekeeping: cash tips, reportable to the employer in the same way for all four occupations.
- A tip charged to the room and distributed by the hotel: a charged tip, and charged tips are cash tips in the IRS definition (Topic No. 761).
- The contracted luggage assistance charge: not a tip. Topic No. 761 names the contracted luggage assistance charge as one of its own examples of a service charge. A charge built into a group or contract rate, which the guest must pay, is non-tip wages when it is paid out to the bell staff.
- The room service charge: also a named service charge in Topic No. 761, and treated the same way: wages, not a tip, even where the property passes it to the staff who delivered the order.
- An amount a guest adds voluntarily on a folio that already carries service charges: the guest's own payment, and a tip. The mandatory charge and the voluntary extra are two different payments, and the rules treat them differently.
room cash counts when it is reported
The wage under the tips
The deduction sits on top of the wage, and the wage for tipped work is set by the Fair Labor Standards Act and by your state. Hotel staff in all four of these occupations are employees in the ordinary arrangement, so the table applies across the whole page: your state's row is the floor under the cash wage, and in the states in the first group of the table there is no tip credit at all, so the full state minimum wage is the cash wage and tips sit entirely on top of it.
| Minimum wage the combined pay must reach | $7.25 an hour |
|---|---|
| Lowest cash wage an employer may pay a tipped employee | $2.13 an hour |
| Maximum tip credit | $5.12 an hour |
| Tipped employee, federal definition | A worker in an occupation that customarily and regularly receives more than $30 a month in tips |
The tip credit is a credit toward the minimum wage, not a discount on it: the employer may count up to $5.12 an hour of a tipped employee's tips toward the $7.25, and if cash wages plus tips do not reach the full minimum wage, the employer owes the difference. States set their own floors on top of the federal one, and the full state table, exactly as the U.S. Department of Labor publishes it, follows. Source: U.S. Department of Labor, Wage and Hour Division, "Minimum Wages for Tipped Employees", last revised July 1, 2026, retrieved November 4, 2026.
States that require the full state minimum wage before tips
| Jurisdiction | Basic combined cash and tip minimum wage | Maximum tip credit | Minimum cash wage | Tipped employee: tips received per month |
|---|---|---|---|---|
| Alaska | $14.00 | |||
| California | $16.90 | |||
| Guam | $9.25 | |||
| Minnesota | $11.41 | |||
| Montana: business with gross annual sales over $110,000 | $10.85 | |||
| Montana: business not covered by the Fair Labor Standards Act, with gross annual sales of $110,000 or less | $4.00 | |||
| Nevada | $12.00 | |||
| Oregon | $15.55 (standard statewide); $16.80 (Portland metro); $14.55 (nonurban counties) | |||
| Washington | $17.13 |
States that require a minimum cash wage above the federal $2.13 an hour
| Jurisdiction | Basic combined cash and tip minimum wage | Maximum tip credit | Minimum cash wage | Tipped employee: tips received per month |
|---|---|---|---|---|
| Arizona | $15.15 | $3.00 | $12.15 | Not specified |
| Arkansas | $11.00 | $8.37 | $2.63 | Not specified |
| Colorado | $15.16 | $3.02 | $12.14 | More than $30 |
| Connecticut: hotel and restaurant workers | $16.94 | $10.56 | $6.38 | Not specified |
| Connecticut: bartenders who customarily receive tips | $16.94 | $8.71 | $8.23 | |
| Delaware | $15.00 | $12.77 | $2.23 | More than $30 |
| District of Columbia | $18.40 | $8.10 | $10.30 | Not specified |
| Florida | $14.00 | $3.02 | $10.98 | More than $30 |
| Hawaii | $16.00 | $1.25 | $14.75 | |
| Idaho | $7.25 | $3.90 | $3.35 | More than $30 |
| Illinois | $15.00 | 40 percent of the applicable minimum wage ($6.00) | $9.00 | Not specified |
| Iowa | $7.25 | 40 percent of the applicable minimum wage ($2.90) | $4.35 | More than $30 |
| Maine | $15.10 | 50 percent of the applicable minimum wage ($7.55) | $7.55 | More than $191 |
| Maryland | $15.00 | $11.37 | $3.63 | More than $30 |
| Massachusetts | $15.00 | $8.25 | $6.75 | More than $20 |
| Michigan | $13.73 | $8.24 | $5.49 | Not specified |
| Missouri | $15.00 | 50 percent of the applicable minimum wage ($7.50) | $7.50 | Not specified |
| New Hampshire | $7.25 | $3.98 | $3.27 | More than $30 |
| New Jersey | $15.92 | $9.87 | $6.05 | More than $30 |
| New Mexico | $12.00 | $9.00 | $3.00 | More than $30 |
| New York | $17.00 (New York City, Long Island and Westchester); $16.00 (remainder of the state) | Varies by region and type of employer | Varies by region and type of employer | Not specified |
| North Dakota | $7.25 | 33 percent of the applicable minimum wage ($2.39) | $4.86 | More than $30 |
| Ohio: employers with annual gross receipts of $405,000 or more | $11.00 | $5.50 | $5.50 | More than $30 |
| Oklahoma | $7.25 | $5.12 | $2.13 | Not specified |
| Pennsylvania | $7.25 | $4.42 | $2.83 | $135 |
| Rhode Island | $16.00 | $12.11 | $3.89 | More than $30 |
| South Dakota | $11.85 | 50 percent of the applicable minimum wage ($5.92) | $5.93 | More than $35 |
| Vermont | $14.42 | 50 percent of the applicable minimum wage ($7.21) | $7.21 | More than $120 |
| Virgin Islands | $10.50 | $6.30 | 40 percent of the applicable minimum wage ($4.20) | Not specified |
| Wisconsin | $7.25 | $4.92 | $2.33 | Not specified |
| West Virginia | $8.75 | 70 percent of the applicable minimum wage ($6.13) | $2.62 | Not specified |
States where the minimum cash wage is the federal $2.13 an hour
| Jurisdiction | Basic combined cash and tip minimum wage | Maximum tip credit | Minimum cash wage | Tipped employee: tips received per month |
|---|---|---|---|---|
| Alabama | $7.25 | $5.12 | $2.13 | More than $30 |
| American Samoa | Special minimum wage rates apply | $2.13 | More than $30 | |
| Georgia | $7.25 | $5.12 | $2.13 | More than $30 |
| Indiana | $7.25 | $5.12 | $2.13 | More than $30 |
| Kansas | $7.25 | $5.12 | $2.13 | Not specified |
| Kentucky | $7.25 | $5.12 | $2.13 | More than $30 |
| Louisiana | $7.25 | $5.12 | $2.13 | More than $30 |
| Mississippi | $7.25 | $5.12 | $2.13 | More than $30 |
| Nebraska | $15.00 | $12.87 | $2.13 | Not specified |
| North Carolina | $7.25 | $5.12 | $2.13 | More than $20 |
| Northern Mariana Islands | $7.25 | $5.12 | $2.13 | More than $30 |
| Puerto Rico | $10.50 | $8.37 | $2.13 | More than $30 |
| South Carolina | $7.25 | $5.12 | $2.13 | More than $30 |
| Tennessee | $7.25 | $5.12 | $2.13 | More than $30 |
| Texas | $7.25 | $5.12 | $2.13 | More than $20 |
| Utah | $7.25 | $5.12 | $2.13 | More than $30 |
| Virginia | $12.77 | $10.64 | $2.13 | More than $30 |
| Wyoming | $7.25 | $5.12 | $2.13 | More than $30 |
- Florida: the figures above are the ones in the July 1, 2026 revision. The Department of Labor's own footnote to this table states that the Florida minimum wage is scheduled to increase by $1.00 every year on September 30 until reaching $15.00 on September 30, 2026.
- Hawaii: the tip credit is permissible only if the combined amount the employee receives from the employer and in tips is at least $7.00 more than the applicable minimum wage.
- Michigan: the Department of Labor's footnote states that the Michigan tipped cash wage is scheduled to increase annually until it reaches 50 percent of the state minimum wage in 2031, and that the Michigan minimum wage is scheduled to increase to $15.00 on January 1, 2027.
- District of Columbia: employers must currently pay a minimum cash wage of at least 56 percent of the standard minimum wage.
- No state minimum wage law: Alabama, Louisiana, Mississippi, South Carolina and Tennessee have no state minimum wage law, and Georgia's law does not apply to tipped employees; employers covered by the Fair Labor Standards Act in those states pay at least the federal minimum wage.
- Not in this table: the Department of Labor notes that some states set subminimum rates for minors or students or a training wage, and some cities and counties set minimum wages higher than the state rate. The Department advises checking with the state labor office for official information.
Estimate the deduction on your own figures
The tips deduction calculator takes your reported tip total and your income, applies the $25,000 limit and the phaseout, and returns an estimated deduction. It asks for nothing but the figures, and the calculation runs in your browser.
Housekeeping staff in particular should read the estimate alongside the reporting section above: cash left in the room only reaches code TP if it was reported to the hotel, and for 2026 the reported figure is the ceiling the deduction is generally limited to.
Other tipped occupations on this site
- Bartender tips deduction, code 101
- Server tips deduction, codes 102 and 103
- Rideshare and delivery driver tips, codes 802 and 804
- Barber and stylist tips deduction, code 603
- Casino dealer tips deduction, code 201
- Golf caddie tips deduction, code 701
- Home services tips deduction, codes 401 to 409
- Valet parking tips deduction, code 801
- All 71 Treasury Tipped Occupation Codes
Questions and answers
I am a doorman at a residential building, not a hotel. Which code covers that work?
Code 301. The final regulations add 'doorman' to the examples for Baggage Porters and Bellhops, and the Treasury Department and the IRS state in the same document that doormen fit this category, giving the residential building case expressly: a building's concierge sits under code 302 and its maintenance workers under code 401 (T.D. 10044).
Guests leave cash in the room and I never filled in a tip report. How would that money reach code TP?
Only through your report. The reporting duty is the employee's: cash tips of $20 or more in a calendar month must be reported to the employer by the tenth day of the following month (Topic No. 761). Cash that is never reported is not in the employer's figures and not in code TP, and for 2026 the deduction is generally limited to the amount the employer separately reported. Tips that were never reported to the employer can be reported by you on Form 4137, and the IRS states that qualified tips reported on Form 4137 can be used to determine the deduction.
The hotel charges tour groups a luggage assistance fee and pays it out to the bell staff. Is my share a tip for the deduction?
No. The contracted luggage assistance charge is one of the service charge examples the IRS itself lists in Topic No. 761. A charge the guest must pay under the booking terms is a service charge, and service charges are non-tip wages even when the property distributes the money to staff. The amount is pay, and it is taxed as pay; it is not a qualified tip and does not belong in code TP.
Sources
- Treasury Decision 10044, April 13, 2026. The final regulations carrying the 71 Treasury Tipped Occupation Codes. Federal Register, Vol. 91, No. 70, pages 19026 to 19056; the list is Table 1 to paragraph (h) of 26 CFR 1.224-2.
- IRS, Topic No. 761, Tips: withholding and reporting. Cash tips include tips received directly from customers, tips from other employees under any tip-sharing arrangement, and charged tips; the $20 a month reporting rule; service charges are non-tip wages, with the IRS's own examples. Read in full November 4, 2026.
- IRS, Fact Sheet FS-2026-13, August 6, 2026, and the IRS W-2 frequently asked questions. For 2026 the tips deduction is generally limited to the amount the employer separately reported in code TP, and amounts reported on a substitute Form 4852 cannot be used for it, while qualified tips reported on Form 4137 can. Note on source level: a fact sheet is IRS guidance, not binding legal authority.
- IRS, Instructions for Forms W-2 and W-3, tax year 2026. Final version, posted January 30, 2026. Carries Box 12 code TP and Box 14b.
- U.S. Department of Labor, Wage and Hour Division, "Minimum Wages for Tipped Employees". The state tipped minimum wage table on this page is transcribed from this source in full: document last revised July 1, 2026, retrieved November 4, 2026.
- Public Law 119-21, enacted July 4, 2025. Created this deduction in section 224 of the Internal Revenue Code, including its $25,000 limit and the phaseout in section 224(b)(2).
Last reviewed: November 4, 2026.