TTOC Codes for Delivery and Rideshare Drivers: 2025 Tax Requirements
Tax Content Lead · 7/6/2026
I've spent years working with delivery and rideshare drivers, and one thing that always surprises them is the importance of accurately reporting tipped income. For tax year 2025, TTOC codes are used to report tipped income on W-2 forms (Box 14b) for delivery and rideshare drivers, which is a critical component of the No Tax on Tips deduction.
What Are TTOC Codes for Delivery and Rideshare Drivers?
TTOC (Treasury Tipped Occupation Codes) are a four-digit number assigned to an occupation by the Secretary of the Treasury. The IRS requires employers to use specific TTOC codes to accurately report tipped income for tax year 2025.
According to the Treasury Department 's website (https://home.treasury.gov/), the TTOC code is essential for employers to report tipped income correctly, especially for delivery and rideshare drivers, who may receive tips from various sources.
To find the correct TTOC code for delivery and rideshare drivers, employers can visit the Treasury Department's website or contact the IRS directly. I've found that it's always best to double-check the code with the IRS to ensure accuracy.
Do Delivery and Rideshare Drivers Need to Report Tips?
Yes, tips of $20+ per month per employer must be reported to the employer. This requirement is essential to ensure accurate reporting of tipped income, which affects the No Tax on Tips deduction for delivery and rideshare drivers.
Employers must report tipped income on W-2 forms (Box 14b) for their employees. This information is crucial for the employees to claim the No Tax on Tips deduction on their tax return.
According to the IRS 's website (https://www.irs.gov/forms-pubs/about-form-w-2), employers are required to report tips received by employees on W-2 forms.
How to Claim the No Tax on Tips Deduction
The No Tax on Tips deduction caps at $25,000 of qualified tips per year (phases out above $150,000 MAGI). This deduction reduces federal income tax for delivery and rideshare drivers who report tipped income.
To claim the No Tax on Tips deduction, delivery and rideshare drivers must report their tipped income on Form 4137 and complete Schedule 1 (Form 1040). One practical tip I've learned is to keep accurate records of tips received throughout the year, as this will make the reporting process much easier.
For example, let's say a delivery driver receives $10,000 in tips for the year. They can claim up to $25,000 of qualified tips on their tax return, reducing their federal income tax. However, if their MAGI exceeds $150,000, the deduction phases out.
Frequently Asked Questions
What are the TTOC codes for delivery and rideshare drivers?
Employers can find the correct TTOC code for delivery and rideshare drivers on the Treasury Department's website (https://home.treasury.gov/) or contact the IRS directly.
How do I report tipped income on my W-2 form?
Employers must report tipped income on W-2 forms (Box 14b) for their employees.
What is the No Tax on Tips deduction and how do I claim it?
The No Tax on Tips deduction caps at $25,000 of qualified tips per year (phases out above $150,000 MAGI). Delivery and rideshare drivers can claim this deduction on Form 4137 and Schedule 1 (Form 1040) to reduce federal income tax.
Can I claim the No Tax on Tips deduction if I have a side hustle?
Yes, delivery and rideshare drivers can claim the No Tax on Tips deduction for their tipped income from their main job or side hustle, as long as they report it correctly on their tax return.
Key Takeaways
Key takeaways
- TTOC codes are used to report tipped income on W-2 forms for delivery and rideshare drivers.
- Delivery and rideshare drivers must report tips of $20+ per month per employer to their employer.
- The No Tax on Tips deduction caps at $25,000 of qualified tips per year (phases out above $150,000 MAGI).
Table: W-2 Box 14b Reporting Requirements
| Employer | Employee | TTOC Code | Reporting Requirements |
|---|---|---|---|
| Employer must report tipped income on W-2 form | Employee must report tipped income on tax return | TTOC code is required for accurate reporting | Employer must report tipped income on W-2 form (Box 14b) |
Frequently Asked Questions (FAQ) - Additional Resources
For more information, please visit the IRS website (https://www.irs.gov/individuals) or consult a tax professional.
Additional Resources
For tax year 2025, Form 8027 is used for large food and beverage establishments to report tipped income.