Digital Nomad
What Digital Nomads Should Know About the 2026 ‘No Tax on Tips’ and Other OBBBA Provisions
US digital nomads working abroad or remotely may now benefit from tip deductions, overtime, and remote-friendly tax changes under the One, Big, Beautiful Bill Act.
By NomadicTax Research Team • 5-8 min read • July 6, 2026
## How OBBBA affects tip deductions for digital nomads
### Occupations that qualify
The final regulations under **section 224** of the Internal Revenue Code now provide a list of more than 70 occupations that “customarily and regularly” receive tips, including food service, hospitality, personal appearance, transportation and delivery, and others. New additions include **visual artists**, **floral designers**, and **gas pump attendants**.([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-listing-occupations-where-workers-customarily-and-regularly-receive-tips-under-the-one-big-beautiful-bill?utm_source=openai))
### What counts as “qualified tips”
To claim the deduction, tips must meet all of these:
- Originating in an eligible occupation on the Treasury’s list
- Paid **voluntarily** by customers or through tip pools (not service charges unless adjustable or optional)
- Received **in cash or equivalent mediums** (including checks, gift cards, mobile app payments)—whether you're abroad or remote, what matters is **how** and **through what instrument** the tip was paid.([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-listing-occupations-where-workers-customarily-and-regularly-receive-tips-under-the-one-big-beautiful-bill?utm_source=openai))
- The deduction applies for **tax years beginning after December 31, 2024**, through **2028**.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions-individuals-and-workers?utm_source=openai))
## Other OBBBA perks digital nomads should know
### Standard deductions & inflation adjustments
These changes affect everyone, including nomads:
- Standard deduction for Tax Year **2026**: $32,200 for married filing jointly; $16,100 for singles/separates; $24,150 for heads of household.([irs.gov](https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill?utm_source=openai))
- Extra deduction for age 65 or older: Single or HOH gets an additional $2,050; married filing jointly, additional $1,650 per qualifying individual.([kiplinger.com](https://www.kiplinger.com/taxes/new-tax-deduction-change-over-65?utm_source=openai))
### Remittance transfer tax
If you send money abroad (e.g. to family, contractors, clients), starting **January 1, 2026**, a **1% excise tax** may apply if the remittance is triggered by certain physical instruments—like cash, money orders, cashier’s checks. Providers must collect the tax, remit on semimonthly/quarterly schedule, file **Form 720**.([irs.gov](https://www.irs.gov/newsroom/treasury-irs-issue-proposed-regulations-on-the-new-remittance-transfer-tax-established-under-the-one-big-beautiful-bill?utm_source=openai))
## Example for a digital nomad
Sam is a remote personal trainer, traveling in Southeast Asia. He earns $5,000 in tips through mobile app payments (US-equivalent cash) during loose tip sharing. He also sends $1,000 home monthly using money orders.
- **Tips deduction**: Sam’s work as a personal trainer counts under the “personal appearance/wellness” category. His app-based tips are equivalent to cash—so eligible, assuming they’re voluntary. He can deduct up to **$25,000** (for an individual return) of qualified tips for 2025-2028.([irs.gov](https://www.irs.gov/newsroom/what-the-no-tax-on-tips-deduction-means-for-you?utm_source=openai))
- **Remittance tax**: Because Sam uses money orders or similar physical instruments, the **1% remittance transfer tax** kicks in. If he uses wire transfers or debit from US bank, though, it might be excluded.([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## Actionable tips for nomads
- Maintain clear records of the **type of tips** you receive and by which means.
- When sending money, choose non-physical payment methods where possible (wire, debit/credit) to avoid remittance tax if applicable.
- File returns in 2026 reflecting tax-years 2025, 2026, etc., so you can claim eligible deductions.
- If you missed claiming “no tax on tips” in earlier filings, consider **amending** your return.([irs.gov](https://www.irs.gov/forms-pubs/claiming-no-tax-on-tips-deduction-for-occupations-that-customarily-and-regularly-receive-tips-may-require-an-amended-return?utm_source=openai))