TIPS Act
Sponsored By: Representative Horsford, Steven [D-NV-4]
Introduced
Summary
Ending the separate tipped minimum wage. This bill would require tipped employees to receive the regular wage under the Fair Labor Standards Act and would add a new federal deduction for reported cash tips.
Show full summary
- Tipped workers would be paid the full FLSA minimum wage instead of a lower tipped rate. Tip pooling among employees who customarily and regularly receive tips would remain allowed.
- Employers would face broader penalties when they unlawfully use or keep tips. Penalties would apply to all tips unlawfully used or kept rather than only the sum tied to tip credits plus unlawfully kept tips.
- A new "cash tips" deduction would let workers deduct reported qualified tips, but it would be disallowed for taxpayers with adjusted gross income above $112,500 and would apply to taxable years beginning after December 31, 2025. Qualified tips would include those from non-owner customers in occupations like cosmetology, hospitality, food and beverage service, parking attendants, and custodial work.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
Full minimum wage and tip protections
If enacted, tipped workers would have to be paid the full federal minimum wage, not a lower tipped wage. You would keep all tips you receive. Employers could still pool tips among workers who usually get tips. If an employer took your tips, damages would equal the total tips taken. These changes would take effect upon enactment.
New tax deduction for cash tips
If enacted, you could deduct your reported cash tips from your taxable income. Only tips reported to your employer under section 6053(a) would count. Tips must be from customers, not owners, in jobs that commonly get tips (like food service, hospitality, cosmetology, parking, and custodial). You could not claim the deduction if your AGI is over $112,500. It would apply to tax years starting after December 31, 2025. Non-itemizers could claim it, and the IRS would adjust withholding rules.
Sponsors & CoSponsors
Sponsor
Horsford, Steven [D-NV-4]
NV • D
Cosponsors
Norcross
NJ • D
Sponsored 2/13/2025
Rep. Titus, Dina [D-NV-1]
NV • D
Sponsored 2/13/2025
Rep. Lee, Susie [D-NV-3]
NV • D
Sponsored 2/13/2025
Rep. Cleaver, Emanuel [D-MO-5]
MO • D
Sponsored 2/13/2025
Rep. Ramirez, Delia C. [D-IL-3]
IL • D
Sponsored 2/13/2025
Rep. McIver, LaMonica [D-NJ-10]
NJ • D
Sponsored 2/13/2025
Thompson (MS)
MS • D
Sponsored 2/13/2025
Rep. Velázquez, Nydia M. [D-NY-7]
NY • D
Sponsored 2/13/2025
Rep. Boyle, Brendan F. [D-PA-2]
PA • D
Sponsored 2/13/2025
Rep. Carter, Troy A. [D-LA-2]
LA • D
Sponsored 2/13/2025
Rep. Kelly, Robin L. [D-IL-2]
IL • D
Sponsored 2/24/2025
Schakowsky
IL • D
Sponsored 2/24/2025
Rep. Foushee, Valerie P. [D-NC-4]
NC • D
Sponsored 2/25/2025
Khanna
CA • D
Sponsored 3/4/2025
Rep. Underwood, Lauren [D-IL-14]
IL • D
Sponsored 3/25/2025
Soto
FL • D
Sponsored 4/1/2025
Rep. Frost, Maxwell [D-FL-10]
FL • D
Sponsored 4/1/2025
Rep. Tokuda, Jill N. [D-HI-2]
HI • D
Sponsored 5/7/2025
Davis (IL)
IL • D
Sponsored 5/7/2025
Rep. Brown, Shontel M. [D-OH-11]
OH • D
Sponsored 5/7/2025
Bishop
GA • D
Sponsored 5/8/2025
Rep. Clarke, Yvette D. [D-NY-9]
NY • D
Sponsored 5/8/2025
Gomez
CA • D
Sponsored 5/21/2025
DelBene
WA • D
Sponsored 5/29/2025
Rep. Vasquez, Gabe [D-NM-2]
NM • D
Sponsored 7/2/2025
Rep. McDonald Rivet, Kristen [D-MI-8]
MI • D
Sponsored 7/2/2025
Ocasio-Cortez
NY • D
Sponsored 7/14/2025
Rep. Pappas, Chris [D-NH-1]
NH • D
Sponsored 7/25/2025
Kennedy (NY)
NY • D
Sponsored 8/29/2025
Rep. Sykes, Emilia Strong [D-OH-13]
OH • D
Sponsored 9/30/2025
Roll Call Votes
No roll call votes available for this bill.
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