Why isn't the credit for tips reducing my income

Jayc_2 · ‎February 14, 2026

I received tip income reported on 1099 NEC. After I enter the amount of tips the web site crashes. If I log back in, the income is not reduced by the tip amount.

LeticiaF1

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If you have any additional questions or information regarding this please return to TurboTax Community and we would be glad to help.

The tips deduction only reduces federal income tax. The tips are still subject to Social Security tax, Medicare tax (FICA), and in some states, state/local taxes. Also remember that the deduction is limited based on your income. The phase out starts if your income is over $150,000 ($300,000 for Married Filing Jointly). If your income is over $400,000 ($550,000 for Married Filing Jointly) you will not get the deduction.