EMCOR Group Workers and the New No Tax on Tips Rule What You Should Know

Healthcare Provider Update: Healthcare Provider for EMCOR Group EMCOR Group typically utilizes a range of healthcare providers and plans depending on regional operations and employee needs. As a company heavily involved in mechanical and electrical construction services, EMCOR tends to partner with well-known insurers and providers that can offer comprehensive healthcare options to accommodate their workforce, which is scattered across various locations. Notably, companies like UnitedHealthcare and Kaiser Permanente are often utilized in such settings for their extensive networks and diverse plan offerings. Anticipated Healthcare Cost Increases in 2026 As we approach 2026, significant increases in healthcare costs are on the horizon, particularly for those enrolled in Affordable Care Act (ACA) marketplace plans. Premiums are expected to rise sharply, with some states facing hikes of up to 66%. This unprecedented spike is driven by a multitude of factors, including escalating medical costs, the potential expiration of enhanced federal premium subsidies, and aggressive rate increases by major insurers. Without renewed congressional support for subsidies, many consumers could see their out-of-pocket premiums soar by over 75%, making access to affordable healthcare increasingly challenging for millions. As the healthcare landscape shifts, it is crucial for individuals and employers alike to strategize on mitigating these impending cost burdens. Click here to learn more

'“EMCOR Group employees may benefit from reviewing how the new tip deduction rules fit into their broader household planning, as thoughtful preparation can make a meaningful difference,” – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'“EMCOR Group employees can use the new tip deduction rules as a reminder to review their overall income strategy and stay informed as guidance evolves,” – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. How the new “No Tax on Tips” law works for eligible employees.

2. Income limits, qualifying occupations, and deduction rules.

3. How EMCOR Group households may evaluate these provisions for planning purposes.

Some Employees May Retain a Greater Share of Their Wages

Eligible employees may deduct up to $25,000 in qualified, voluntary tips from their federal taxable income under a new federal tax rule that took effect on July 4, 2025. ¹  EMCOR Group workers in eligible service-related roles may want to stay informed about these changes.

- The deduction applies to tax years 2025 through 2028.

- Income earned as tips is not taxable up to $25,000, however the deduction phass out for joint filers with Modified Adjusted Gross Income (MAGI) above $300,000 and single filers above $150,000. ²

What Does “No Tax on Tips” Mean?

A new provision under the One Big Beautiful Bill Act called “No Tax on Tips” permits eligible employees to deduct as much as $25,000 in voluntary tips from federal taxable income, provided that IRS qualifications are met. Voluntary tips do  not  include mandatory service charges.

To qualify, an employee must work in a profession the IRS and Treasury Department define as  “customarily and regularly receiving tips.”  A preliminary list includes roughly 70 job types, including:

• - Food and beverage service

• - Events and entertainment

• - Guest services and hospitality

• - Home repair and maintenance services

• - Personal services

• - Personal well-being and appearance

• - Recreation and education

• - Delivery and transportation

Health care, sports, and performing arts positions are excluded because these roles are not considered to receive tips regularly.

Did No Tip Tax Pass?

Yes. This provision became law on July 4, 2025 as part of broader federal tax reform, which may interest EMCOR Group employees with members in eligible occupations.

How Does No Tip Tax Work?

Employees in qualifying roles may deduct up to $25,000 in voluntary tips from gross income. Key points:

• - The deduction phases out for single filers at $150,000 MAGI.

• - It begins phasing out for joint filers at $300,000 MAGI.

• - It applies whether the taxpayer uses the standard deduction or itemizes.

• - It is available from 2025 through 2028.

For example, a restaurant server in the  22% tax bracket  who receives  $20,000  in qualified voluntary tips may reduce their federal income tax by up to  $4,400  if IRS requirements are met. This may be meaningful for households that include EMCOR Group employees.

When Does Tipping Become Tax-Free?

The deduction begins with the 2025 tax year, meaning eligible employees can claim it when filing their 2025 federal return in early 2026. This timing may matter for EMCOR Group employees managing household tax considerations.

Does This New Law Make Tips Entirely Tax-Free?

Qualified voluntary tips (up to $25,000) may be deducted from federal taxable income if the employee meets the occupation and MAGI rules. However, employees—including those in EMCOR Group households—may still owe:

• - State income taxes

• - Local income taxes

• - Social Security and Medicare taxes

• - Taxes on tips in excess of $25,000

Is the No Tax on Tips Rule Limited to Cash Tips?

No. Voluntary tips received by cash, credit card, or tip pool may qualify. Required service charges do not. This distinction is important for EMCOR Group households with individuals in service-based roles.

How to Make a Deduction Claim

Eligible employees can claim the deduction by referring to IRS instructions:

• 1. Report all earnings, including tips, on Form 1040, line 1a.

  2. Complete Schedule 1-A, for deductions such as qualified tips and overtime.

  3. Report total additional deductions on Form 1040, line 13b.

Employees may deduct only the qualified voluntary tips actually received, up to the $25,000 limit. EMCOR Group employees should remember that eligible tips must still be properly reported for payroll tax purposes.

More Guidance Is Expected

The IRS and Treasury Department will release additional information. Because each household's situation differs, individuals—including those working at EMCOR Group—may want to speak with a qualified tax professional for personalized questions.

What Is No Tax on Overtime?

Another provision within the 2025 law allows eligible employees to deduct qualifying overtime pay from federal taxable income—up to $12,500 for single filers or $25,000 for joint filers. ¹  The MAGI phase-out thresholds are the same as the tip deduction. This rule also covers 2025 through 2028, which may influence planning for EMCOR Group households evaluating income timing.

Do You Need Assistance Navigating These New Tax Laws?

The Retirement Group can help EMCOR Group employees understand how these deductions may influence their retirement planning approach. You can speak with a representative by calling  (800) 900-5867 .

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Sources:

1. Internal Revenue Service. “One, Big, Beautiful Bill Provisions.”  IRS , 2025,  www.irs.gov/newsroom/one-big-beautiful-bill-provisions .

2. Fidelity Investments. “No Tax on Tips: A New Deduction Explained.”  Fidelity Learn , 19 Nov. 2025,  www.fidelity.com/learning-center/personal-finance/no-tax-on-tips .

3. Lautz, Andrew. “How Does ‘No Tax on Tips’ Work in the One Big Beautiful Bill?”  Bipartisan Policy Center , 30 July 2025, bipartisanpolicy.org/explainer/how-does-no-tax-on-tips-work-in-the-one-big-beautiful-bill. Accessed 8 Dec. 2025.

4. “‘No Tax on Tips’ Explained.”  TaxSlayer Support , TaxSlayer, 2025, support.taxslayer.com/hc/en-us/articles/40291875700749--No-Tax-on-Tips-Explained. Accessed 8 Dec. 2025.

5. Mahoney, Michael K., and Stephen Kenney. “New IRS Guidance Pinpoints How Individuals May Take Tax Breaks for Tips and Overtime.”  Ogletree Deakins , 21 Nov. 2025, ogletree.com/insights-resources/blog-posts/new-irs-guidance-pinpoints-how-individuals-may-take-tax-breaks-for-tips-and-overtime. Accessed 8 Dec. 2025.