It’s official: Casino chips count for ‘no tax on tips’ policy, benefiting Nevada workers
Summary
The Treasury has issued guidance confirming that tips paid in casino chips — and other non-cash tips such as cards, checks, gift cards and electronic payments — qualify for the federal “no tax on tips” deduction. The guidance also says tips reported under Tip Rate Determination Agreements (TRDA) or Gaming Industry Tip Compliance Agreements (GITCA) are covered. Automatic service charges generally do not qualify unless a customer can remove or change them without penalty.
Key Points
- Casino chips and other tokens readily exchangeable for a fixed cash amount are eligible for the “no tax on tips” deduction.
- Tips reported using TRDA or GITCA set rates will count, and workers can still report tips above the rate for additional deduction.
- Eligible tips include cash, check, credit/debit, gift cards and electronic payments; most digital assets, meals and event tickets are excluded.
- Automatic gratuities are excluded unless customers can alter or remove them without penalty.
- Workers will be able to claim the deduction on 2025 tax filings: up to $25,000 of qualified tips can be subtracted from taxable income, phasing out above $150,000 modified adjusted gross income; the policy expires end of 2028.
- The guidance clarifies which occupations reported tips most often — bartenders, wait staff, gambling booth cashiers and gambling dealers rank high — making this especially relevant to Nevada’s casino workforce.
- A public hearing on the policy is scheduled for 23 October in Washington.
Content summary
The Treasury Department’s new guidance clears up prior confusion about what counts as a tip under the “no tax on tips” policy created by the Republican budget law. It explicitly includes casino chips and other tokens that are functionally cash equivalents, which is a clear win for Nevada given the large number of tipped gaming workers. The guidance also confirms that industry-wide tip rate agreements (TRDA/GITCA) qualify, allowing workers who use set-rate reporting to take the deduction without tracking every individual tip. However, automatic service charges remain excluded unless customers have a genuine no-penalty option to remove them. Workers can claim the benefit on their 2025 returns, subject to the $25,000 cap and income phaseout; the provision sunsets at the end of 2028.
Context and relevance
This matters for tens of thousands of Nevadans employed in casinos and related hospitality roles: it turns a policy promise into actionable tax relief for many tipped workers. It also resolves industry and union concerns around how tip rates are treated, and it affects payroll and reporting practices for gaming employers. The decision reflects broader federal attempts to simplify tip taxation while drawing lines around employer billing practices such as auto-gratuities.
Why should I read this?
Short version: if you work in a casino or handle tips in Nevada, this changes what you can deduct — and that’s money in your pocket next tax year. If you’re an employer or payroll person, it tells you which tip types and reporting agreements qualify so you can prepare. Quick and useful — saves you digging through the Federal Register yourself.
Author style
Punchy: this is a concrete win for gaming-floor staff — clear rules, an easy headline (chips count), and real implications for paypackets and tax filings. If you or your staff get tipped in non-cash ways, read the details so you can claim what you’re owed.