Bill > HR558

This bill introduces a temporary tax exemption for tip income in the United States, allowing workers in tip-based industries such as food service, hospitality, and cosmetology to exclude up to $20,000 of tips from their gross income annually for a five-year period from 2025 to 2029. The legislation modifies the Internal Revenue Code to create a new section (139J) that provides this tax relief, with specific provisions ensuring that while the tip income is excluded from general tax calculations, it can still be considered when determining eligibility for certain tax credits like the Child Tax Credit and Earned Income Credit. The bill requires the Treasury Department to adjust tax withholding tables to accommodate this new exclusion, and the provision will automatically expire on December 31, 2029, meaning tips received after that date will be taxed normally. This targeted approach aims to provide financial relief to workers in professions that traditionally rely on tips as a significant portion of their compensation.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/558/all-info