Are sports and recreation instructors tips tax deductible in 2026?
Yes — sports and recreation instructors are on the IRS tipped occupation list (code 706). Tips in this job are deductible for 2026, up to $25,000, if the customer chose the amount and could have declined.
Treasury Tipped Occupation Code 706 · Recreation and instruction · official title: Sports and Recreation Instructors
How tipping works in this job
Ski instruction is the most consistently tipped case: a family who had a good week hands the instructor cash on the last day, often substantially. Surf and dive instruction follows the same end-of-course pattern. Where the school assigns you to a group lesson the tip is smaller and split; private lessons tip far better.
The regulations say: Teach or instruct individuals or groups for the primary purpose of recreation, rather than for an occupational objective, educational attainment, competition, or fitness. Examples given: Diving instructor, ski instructor, tennis teacher, surfing instructor.
The thing most likely to disqualify your tips
Purpose matters here in the same way it does for self-enrichment teachers. Recreational instruction is in this code; coaching a competitive athlete, or teaching towards a certification, is not. A dive instructor running a certification course is doing something the code specifically carves out, even though the same person teaching a resort try-dive is squarely inside it.
Check your own numbers
Pre-filled for sports and recreation instructors. Runs entirely in your browser — nothing is uploaded.
Step 1 — your occupation
Checking for Sports and recreation instructors (Treasury code 706). This occupation is on the list.
Step 2 — is it actually a tip?
Answer for the money you are asking about. If some of your income is tips and some is service charges, run them separately.
Step 3 — your tips and income
The phase-out runs on modified AGI, which for most people is the same as AGI.
3 questions left to answer.
OBBBA Deductions · obbbadeductions.com
Tips deduction worksheet — tax year 2026
The three tests, as answered
- Does the customer decide the amount? not answered
- Can the customer decline to pay it? not answered
- Is it a mandatory service charge or auto-gratuity? not answered
Answer the 3 remaining questions above for a result.
Watch out for this in your job: Purpose matters here in the same way it does for self-enrichment teachers. Recreational instruction is in this code; coaching a competitive athlete, or teaching towards a certification, is not. A dive instructor running a certification course is doing something the code specifically carves out, even though the same person teaching a resort try-dive is squarely inside it.
Educational estimate only, not tax advice. It runs entirely in your browser and nothing you type is sent anywhere. The deduction is scheduled to expire after tax year 2028.
How this applies to sports and recreation instructors
Ski instruction is the best-tipped work in this category and sets the pattern for the rest. A family books a private instructor for a week, spends five or six hours a day with them, watches their children go from snowploughing to parallel turns, and hands over cash on the last afternoon. Amounts are large relative to the lesson price, and the whole season’s tipping is concentrated into a few winter months.
Surf and dive instruction follows the same end-of-course shape at a smaller scale. Resort try-dives, week-long surf camps and holiday lesson blocks all finish with a moment where the student decides what the experience was worth. Tennis is more episodic, with regular clients tipping at the holidays rather than after each hour on court.
The carve-out in the code text is the thing to watch, because it excludes some of the most skilled work in the trade. This occupation is instruction whose primary purpose is recreation — expressly not instruction for an occupational objective, educational attainment, competition or fitness. A dive instructor running a resort experience is squarely inside it; the same instructor running a certification course is teaching towards a qualification, which the code carves out. A coach preparing a junior athlete for competition is outside it too, even though the sport and the person are unchanged.
Private lessons tip far better than group lessons, and where a school assigns you to a group the money that appears is smaller and often split. Ski and snowsports schools frequently pool group-lesson tips across instructors on a shift, which turns them into a documented distribution — usually the only part of a seasonal instructor’s tip income that anyone else has counted.
The three tests, whatever your job
Paid voluntarily
The customer sets the amount and can decline to pay it.
Paid in cash or a cash equivalent
Card payments and mobile payments count.
Received directly or through a tip pool
Both routes qualify.
Questions
- Are sports and recreation instructors on the IRS tipped occupation list?
- Yes. Sports and Recreation Instructors is Treasury Tipped Occupation Code 706, in the recreation and instruction category. The regulations describe it as: Teach or instruct individuals or groups for the primary purpose of recreation, rather than for an occupational objective, educational attainment, competition, or fitness.
- What is the most common reason sports and recreation instructors lose the deduction?
- Purpose matters here in the same way it does for self-enrichment teachers. Recreational instruction is in this code; coaching a competitive athlete, or teaching towards a certification, is not. A dive instructor running a certification course is doing something the code specifically carves out, even though the same person teaching a resort try-dive is squarely inside it.
- How much of my tips can I deduct?
- Up to $25,000 per return, whatever your filing status. The cap applies first, then the amount is reduced by $100 for every $1,000 of modified adjusted gross income above the threshold for your filing status.
- Does a mandatory service charge count as a tip?
- No. A mandatory service charge or automatic gratuity is not a qualifying tip, and the final regulations confirmed this explicitly. It does not qualify even when the customer cannot decline it — a qualifying tip has to be an amount the customer chose to give.
Related occupations in recreation and instruction
- 701
Golf caddies
You caddie for golfers — carrying the bag, managing clubs and advising on club selection and strategy.
- 702
Self-enrichment teachers
You teach for enjoyment rather than for a qualification — music lessons, craft classes, art, dance.
- 703
Recreational and tour pilots
You fly sightseeing, recreational or jump flights — helicopters, light aircraft, balloons.
Occupation data transcribed from T.D. 10044 — final regulations on occupations that customarily and regularly received tips, Treas. Reg. § 1.224-1(h) table 1, last verified 2026-09-08. Read the regulations.