IRS Proposes Easier Tip Reporting Form for Barbers and Salons
Published Date: 5/12/2026
Notice
Summary
The IRS wants feedback on a new form called the Tip Reporting Alternative Commitment (TRAC) Agreement, designed to help salons and barbershops report tips more easily and fairly. This affects cosmetologists, barbers, and their employers, aiming to reduce paperwork hassle without extra costs. Comments are open until July 13, 2026, so now’s the time to speak up and shape how tip reporting works!
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
Time Burden on Salons and Barbershops
If you run a salon or barbershop, the IRS estimates completing the Tip Reporting Alternative Commitment (TRAC) Agreement takes 9 hours and 22 minutes per response. The agency estimates 4,600 responses and a total of 43,073 annual burden hours for the cosmetology and barber industry.
Helps Employers and Employees Follow Tip Rules
The TRAC Agreement includes information to help cosmetology and barber employers and employees understand and comply with section 6053(a). Section 6053(a) requires employees to report all their tips monthly to their employers.
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Key Dates
Department and Agencies
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