No Tax on Tips Act
Sponsored By: Representative Buchanan
Introduced
Summary
A new deduction for qualified tips would let tipped workers subtract reported cash tips from taxable income. The bill also expands an employer Social Security tip credit to cover beauty services and changes how the deduction is treated for itemizers and withholding.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
Tax break for tipped workers
If enacted, tipped workers could deduct cash tips they report to their employer, up to $25,000 a year. Your job would need to be on a list of tipped occupations the Secretary would publish within 90 days. The deduction would not apply if you earned over the “highly compensated employee” limit from the same employer last year. You could claim it even if you do not itemize, and it would not be limited by usual itemized deduction caps. IRS withholding tables would be adjusted to reflect this. The change would apply to tax years beginning after December 31, 2024.
Tip credit for beauty businesses
If enacted, employers could claim the existing tip credit for tips paid on beauty services, not just food and drink. Covered services would include barbering and hair care, nail care, esthetics, and body and spa treatments, where tipping is customary. This would lower employer Social Security payroll tax costs. The bill would also revise how the minimum-wage baseline applies for food and beverage establishments, keeping the January 1, 2007 baseline language. The change would apply to tax years beginning after December 31, 2024.
Sponsors & CoSponsors
Sponsor
Buchanan
FL • R
Cosponsors
Donalds
FL • R
Sponsored 1/16/2025
Van Orden
WI • R
Sponsored 1/16/2025
Horsford
NV • D
Sponsored 1/16/2025
Timmons
SC • R
Sponsored 1/22/2025
Finstad
MN • R
Sponsored 1/22/2025
Tenney
NY • R
Sponsored 1/23/2025
Langworthy
NY • R
Sponsored 2/18/2025
Ezell
MS • R
Sponsored 2/26/2025
Hamadeh (AZ)
AZ • R
Sponsored 2/26/2025
Perry
PA • R
Sponsored 2/26/2025
Rulli
OH • R
Sponsored 3/3/2025
Bilirakis
FL • R
Sponsored 3/3/2025
Luna
FL • R
Sponsored 3/4/2025
Gill (TX)
TX • R
Sponsored 3/4/2025
Collins
GA • R
Sponsored 3/18/2025
Hudson
NC • R
Sponsored 3/21/2025
Moran
TX • R
Sponsored 4/24/2025
Hinson
IA • R
Sponsored 4/24/2025
Vindman
VA • D
Sponsored 5/13/2025
Amodei (NV)
NV • R
Sponsored 5/13/2025
Kean
NJ • R
Sponsored 6/11/2025
Mast
FL • R
Sponsored 6/11/2025
Fields
LA • D
Sponsored 6/11/2025
Davis (NC)
NC • D
Sponsored 8/8/2025
Pappas
NH • D
Sponsored 8/8/2025
Harder (CA)
CA • D
Sponsored 8/29/2025
Perez
WA • D
Sponsored 10/6/2025
Roll Call Votes
No roll call votes available for this bill.
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