Yes. The 2025 expansion of the FICA tip credit made 2025 the first year beauty businesses can claim it. If your salon, spa, barbershop, or nail salon has W-2 staff who report tips, you can claim a credit of 7.65% of those reported tips for the 2025 tax year, dollar for dollar against income tax, and again every year going forward. There are no upfront costs and no out-of-pocket money. You pay only if a credit is secured.
Before 2025, this credit belonged to restaurants and bars. The 2025 law extended the same credit to beauty and personal care businesses where tipping is customary. Nothing about your payroll needs to change: the credit is calculated from the tips your team already reports and the FICA tax you already pay on them.
One limit matters: there is no retroactive lookback to years before 2025 for beauty businesses. The multi-year lookback you may have heard about applies to restaurants only. For a salon or spa, 2025 is year one, which is exactly why claiming it now matters: every year you wait is a year of credit left unclaimed, and the credit repeats annually from here.
For a first number, try the free tip credit estimator and choose the salon and spa option: it takes about a minute and needs no personal details.
| Reported staff tips in 2025 | Credit for 2025 |
|---|---|
| $150,000 | about $11,475 |
| $300,000 | about $22,950 |
These examples are illustrative; your exact credit comes from your payroll records and qualifying wages, which the free eligibility check reviews. If your 2025 return is not filed yet, the claim belongs on it. If it is already filed, the eligibility check confirms the right filing path for your situation.
Can we claim years before 2025? No. There is no retroactive lookback to years before 2025 for beauty businesses. 2025 is the first claimable year, and the credit repeats every year after.
Do booth renters count? No. Booth renters are independent businesses, not employees. The credit is based on tips reported by your W-2 employees on payroll.
What does it cost? The eligibility check is free. There are no upfront costs and no out-of-pocket money. You pay only if a credit is secured. Claims are a pure success fee of 8.75% of the credit recovered. No recovery, no fee.
Free check. 8.75% success fee only. No recovery, no fee.