Tips given in the form of casino chips will be eligible for tax breaks under the new “no tax on tips” policy, according to Friday guidance issued by the Treasury Department.

The new guidance provides more clarity about the policy first proposed by President Donald Trump in Las Vegas last year and codified by the Republican megabill passed this summer. 

There had been some confusion about which tips would qualify under the policy, senior Treasury officials told reporters in a Thursday briefing. They clarified that not only will workers be able to deduct taxes for tips given in cash, but also for those given by check, credit or debit card, gift card, electronic payment and “tangible or intangible tokens that are readily exchangeable for a fixed amount in cash (such as casino chips).”

The inclusion is a boon for workers in Nevada, where tens of thousands of people are employed by casinos and stand to benefit from the new policy. 

In another win for the state, tips received under a Tip Rate Determination Agreement (TRDA) or Gaming Industry Tip Compliance Agreement (GITCA) will also be included under “no tax on tips.” These agreements allow gaming industry workers to avoid tracking individual tips by using a set rate to report tips for tax purposes. 

All five of Nevada’s congressional Democrats signed an August letter urging the administration to allow workers to take the deduction based on their GITCA tip rate. Under the new guidance, workers will be able to do so and will also be able to report any tips above the tip rate to get an even bigger tax break. 

Workers will be able to claim their “no tax on tips” deduction when they file their 2025 taxes next year. The policy will allow them to subtract up to $25,000 of qualified tips from their taxable income and begins to phase out for those earning more than $150,000 in modified adjusted gross income. “No tax on tips” is set to expire at the end of 2028.

Treasury officials told The Nevada Independent on Friday that there have been no substantive changes to the initial broad list of occupations covered by the policy.

A detailed table provided in the new Treasury guidance lists the share of workers in each occupation estimated to have reported tips, with the highest rates recorded for bartenders, wait staff, gambling booth cashiers and gambling dealers. 

Treasury also clarified what types of payments won’t be classified as tips — including meals, event tickets and most digital assets.

Automatic gratuities are not included either, unless customers can alter them without penalty. For example, a service charge of 18 percent automatically added to a bill for a large party would not be included, but an 18 percent tip selected by a customer at a service counter would be, as long as they had the option not to tip at all. 

Nevada’s congressional Democrats, as well as the Culinary Workers Union Local 226, had previously asked the administration to include all of these payments. 

“Functionally, for employees, there is no distinction between auto-gratuity and a tip, and inclusion of this income as eligible will prevent arbitrary distinctions between tip practices that would disadvantage workers based solely on the business model of their employer,” the lawmakers wrote in their August letter. 

A public hearing on “no tax on tips” will take place in Washington on Oct. 23.