IRS Transportation & Delivery (TTOC)
Do bike couriers qualify for the No Tax on Tips deduction?
Bike couriers — legal-document couriers, medical-sample messengers, bicycle food delivery, urban parcel couriers — are on the IRS Treasury Tipped Occupation Code list. This role is distinct from generic delivery driving because much of the work is business-to-business (legal firms, medical offices, urban design agencies), which has different tip patterns than consumer food delivery. Voluntary tips from either type qualify.
Short answer
Yes. Bike couriers and bicycle messengers are on the IRS TTOC list. Voluntary tips — from consumer delivery apps, from businesses tipping at pickup or dropoff, and from cash tips at the door — qualify for the federal No Tax on Tips deduction, up to $25,000 per year. Base delivery pay from the platform or courier company is wages/business income, not tips.
How much could you save?
Typical tip income for bike couriers.
Full-time bike couriers report $2,000-$9,000 in annual tip income. Consumer food-delivery bike couriers (Grubhub bike, urban Uber Eats couriers) cluster in the middle. B2B courier work (legal, medical) sees smaller per-run tips but sometimes retainer-style relationships that produce regular smaller tips. Cash tips from receptionists and mail-room staff are common.
For bike couriers specifically
What counts as a qualified tip — and what doesn't.
✓ Qualifies
- Voluntary in-app tips from consumer delivery orders
- Voluntary cash tips at delivery points (residential doors, office reception)
- Voluntary tips from B2B recipients (law-firm mail rooms, medical offices)
- Holiday/appreciation tips from regular business clients
✗ Does not qualify
- Base delivery pay, per-run pay, or platform incentives
- Rush fees or after-hours fees the courier company charges
- 'Insurance surcharges' on legal or medical documents
- Retainer fees paid by regular business clients (business income, not tips)
- Digital-asset/crypto tips
A worked example
Luis, a real-world bike courier.
Luis is a full-time urban bike courier mixing app deliveries + legal-document runs, 1099, single filer, MAGI $32,000. For the tax year, she logged $5,400 in qualified tips (app tips + cash from law firms). She sits in the 12% federal marginal bracket.
- Deduction allowed: Full $5,400 deduction (under cap and SE income)
- Estimated savings: About $648 off federal income tax (SE tax still applies)
This is an illustrative example, not a guarantee. Your actual savings depend on your filing status, total income, state, and other deductions.
Questions specific to bike couriers
What other bike couriers ask.
Are business B2B tips different from consumer food-delivery tips?
For §224 purposes, no. Voluntary tips are voluntary tips regardless of who tipped you. A $5 cash tip from a law-firm receptionist qualifies the same way as a $5 app tip from a food-delivery customer. Log both.
What about a monthly retainer from a law firm — is that a tip?
No. A retainer is a business fee for services — that is contract income on Schedule C. Only voluntary tips ON TOP of the retainer relationship qualify. Holiday cash a firm gives you around December generally qualifies as a voluntary tip.
Do I have to be on a bike to qualify?
The IRS TTOC list references bicycle couriers/messengers as a subset of couriers. If you sometimes deliver on foot, e-bike, or scooter, those runs are still courier work and voluntary tips still qualify. Motorcycle couriers may be treated as delivery drivers rather than bike couriers — the deduction rules are the same.
Platform incentives and bonuses — do those qualify?
No. Platform incentives (peak pay, streak bonuses, quest completion pay) are business income from the platform, not customer tips. They are ordinary Schedule C income. Only the voluntary customer tip line on your app statement qualifies for §224.
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Track every shift
The deduction is real money — if you can prove your tips.
Qualified Tips logs each shift the moment it ends — timestamped, exportable, IRS-aligned.