DoorDash Couriers Can Deduct Up to $25,000 in Tips Through 2028
DoorDash couriers can now deduct up to $25,000 in tip income on federal tax returns for the 2025-2028 tax years via Schedule 1-A, reducing tax liability by up to $6,000. Platforms must itemize tips on 1099 forms from 2026, and deductions phase out above $150,000 single income ($300,000 married).
1. New Tip Deduction Details
The 2025–2028 tax provision lets tipped workers subtract up to $25,000 of tip income annually using Schedule 1-A, cutting federal tax bills by $840 to $6,000 depending on bracket. Eligible roles include rideshare drivers, restaurant servers, barbers, house cleaners and other customary tip occupations.
2. Impact on DoorDash Couriers
DoorDash couriers benefit from higher net earnings and potential retention gains as tip deductions lower their tax burden. For 2025, platforms report total payments on Form 1099-K without separate tip lines, but must explicitly itemize tip income on 1099 forms starting in 2026.
3. Eligibility and Limitations
Tips must be voluntary and paid in cash, card or gift card to qualify; cryptocurrency or property tips are excluded. Self-employed workers cannot use deductions to produce a business loss, married filers must file jointly, and the benefit phases out above $150,000 individual income and $300,000 joint income.