Tipped occupations ยท Transportation and Delivery
Valet and Parking Attendant Tips and the 2026 Tips Deduction: Code 801
Parking and valet attendants appear on the Treasury list behind the 2026 tips deduction as occupation code 801, in the Transportation and Delivery category of the final regulations (T.D. 10044). The regulation describes the work as parking vehicles or issuing tickets for customers in a parking lot or garage, in environments such as a hotel or a restaurant, and its examples for the code are 'parking garage attendant' and 'valet parker': one code covers both the attendant who takes the keys at the curb and the attendant who hands out tickets at a self-park garage. A valet is an employee, of the venue or of the parking company that operates the stand, so reported tips reach Box 12 of the W-2 with code TP and code 801 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.
Last reviewed: November 4, 2026.
The facts, in one table
| Treasury Tipped Occupation Code | 801, Parking and Valet Attendants |
|---|---|
| Category in the final regulations | Transportation and Delivery |
| Related codes in the same category | 802, Taxi and Rideshare Drivers and Chauffeurs; 803, Shuttle Drivers; 804, Goods Delivery People; 809, Home Movers |
| Also inside code 801 | Parking garage attendants who issue tickets at self-park facilities. The regulations give 'parking garage attendant' and 'valet parker' as the examples for this one code (T.D. 10044, Table 1) |
| 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 code 801 in Box 14b. Where a parking operator runs the garage or the valet stand under contract, the operator is the employer on that W-2 |
| 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 parking fee is not a tip
How a valet's tips reach the tax record
The route is the employee route, with one wrinkle about who the employer is. Valet operations are frequently run by a parking company under contract to the hotel, restaurant, hospital, or venue, and the W-2, and with it code TP, comes from whoever employs the attendant, which is often the operator rather than the property whose name is on the door. An attendant who works stands run by two different operators in one year receives two W-2s, each with its own code TP.
The reporting duty is the standard one: 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). Most valet tips are still cash at the curb, but tips added in a parking app or on a card payment and distributed by the operator are part of the same reported total: the IRS definition of cash tips includes charged tips, and the regulations add amounts paid through a mobile payment application denominated in cash. What you report is what the employer can print in code TP, and code TP is the figure the 2026 deduction is generally limited to.
If your January W-2 shows no code TP, or a figure your own records do not support, 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 a valet or parking attendant
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 money at the curb sorts out like this:
- Cash handed over when the car comes back, in an amount the driver chooses: the core case, a cash tip.
- A tip added in the parking app or on the card slip, where the driver sets the amount: a tip on the same footing. The regulations include electronic settlement and mobile payment applications denominated in cash in the definition of cash tips (26 CFR 1.224-2).
- The parking fee itself, including a valet parking charge the venue adds to the bill: not a tip. The regulation's own description of this occupation notes that the attendant 'may collect fee': the fee is the establishment's price for the parking, an amount the customer must pay, and a price is not a voluntary payment however it is collected.
- A flat service charge an event venue adds for valet service and distributes to the crew: not a tip. A mandatory amount added by the establishment is a service charge under the rules even when it is passed to employees; a voluntary extra a driver adds on top of it is a tip.
- Tips pooled across a shift and split among the attendants: tips received under a tip-sharing arrangement are cash tips for each attendant who receives a share.
app tips the driver sets are cash tips
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. Valet and garage work is employee work, for the venue or for a parking operator, so the table applies directly, and the spread between states is wide: at the federal floor the cash wage can be $2.13 an hour with tips expected to carry the pay to $7.25, while the states in the first group of the table require the full state minimum wage in cash before tips.
| 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.
If you worked for more than one operator in the year, the estimate's starting figure is the sum of the code TP amounts across your W-2s: the deduction is figured per return, not per employer.
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
- Hotel staff tips deduction, codes 301 to 304
- All 71 Treasury Tipped Occupation Codes
Questions and answers
I work the valet stand for a parking company at two hotels. Which W-2 carries my tips?
Each employer's W-2 carries the wages and reported tips from that employer's payroll, each with its own Box 12 code TP and code 801 in Box 14b. An attendant employed by one operator at two properties usually has one W-2 from that operator; an attendant employed by two different operators has two. The tips deduction is figured on the return from the reported totals, within the single $25,000 per return limit.
Drivers tip through the garage app more than in cash now. Does an app tip count the same way?
Yes, on the definition. Cash tips in the final regulations include amounts paid by cash, check, credit or debit card, gift card, and any other form of electronic settlement or mobile payment application denominated in cash (26 CFR 1.224-2). An app tip the driver sets is a charged tip in the same sense as a card tip, and it belongs in the total reported to the employer.
The restaurant charges every guest a valet fee, and drivers still hand me cash. Which of the two is the tip?
The cash. The fee is the establishment's charge for the service, an amount every guest must pay, and the regulation's description of this occupation treats collecting the fee as part of the attendant's duties rather than as a payment to the attendant. The money a driver hands you voluntarily, in an amount the driver decides, is the tip.
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.
- Treasury Decision 10044, April 13, 2026, regulatory text of 26 CFR 1.224-2. Cash tips include tips received through a mandatory or voluntary tip-sharing arrangement such as a tip pool, and amounts paid in cash media including tokens readily exchangeable for a fixed amount in cash, with casino chips as the regulation's own example; a tip is an amount in excess of the amount agreed to, required, or charged for the services; amounts received by a manager or supervisor through a tip pool are not qualified tips. Read in full November 4, 2026.
- 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.