Golf caddies are a listed tipped occupation, so reported tips deduct from federal taxable income up to $25,000 through 2028, with or without itemizing. Caddie pay is a blend of a loop fee and a gratuity, and at many clubs the whole thing arrives in cash — which makes reporting the pivotal issue.
Most caddies are treated as independent contractors, not employees. That means you're self-employed: your caddie income is your own to report, the deduction is capped at the net income of that activity, and only tips you reported qualify. Where a club runs a caddie program that pays through payroll, W-2 caddies deduct the tips reported there instead.
The deduction reduces federal income tax, not self-employment tax, and phases out well above a typical caddie's income ($150,000 single). Caddie work is seasonal, cash-heavy, and frequently underreported, so 2025 claims were missed at high rates — and for junior and student caddies, reporting the income can also matter for other credits. A 1040-X recovers a missed deduction.