Unlock Your Tax Savings: New tax deductions could mean bigger refunds for restaurant employees

Millions of restaurant and hospitality workers may be eligible for new federal tax deductions when they file their 2025 tax returns—but only if they understand how the rules work and how to track their income correctly.

Under the No Tax on Tips (NTOT) provision, eligible employees may be able to deduct up to $25,000 in reported tips from their taxable income. The No Tax on Overtime (NTOO) provision allows nonexempt employees to deduct overtime premium pay—up to $12,500 for individuals or $25,000 for joint filers. In some states, workers can use these deductions on their state filings, but they can’t in others.

To help employees understand these changes and get the most out of them, the National Restaurant Association is hosting an employee-focused webinar with H&R Block. The session will explain what income qualifies, how the deductions work, and what tipped and hourly employees should do now to be prepared before time runs out to files their taxes.

Key Takeaways:

• How the new federal NTOT deduction works and which tipped income may qualify
• What the NTOO deduction means for nonexempt employees who earn overtime pay
• Why accurate tip and wage reporting matters—and what employees should be prepared to share at tax time
• What to expect when filing 2025 tax returns, including practical guidance from tax professionals

This session gives restaurant employees clear, practical information to help them understand new tax deductions and make the most of their tax filings.