Bill > HR1314

This bill, known as the Tipped Income Protection and Support Act (TIPS Act), proposes significant changes to how tipped employees are compensated and taxed. The bill eliminates the separate, lower minimum wage for tipped workers, requiring employers to pay all employees the standard federal minimum wage. It also mandates that employees retain all tips they receive, though tip pooling among workers who customarily receive tips is still permitted. Additionally, the bill introduces a new tax deduction for cash tips received by employees in tip-based occupations such as food service, cosmetology, hospitality, parking attendance, and custodial services. This deduction is limited to individuals with an adjusted gross income of $112,500 or less and applies to tips received from unrelated parties who do not have an ownership stake in the employing business. The tax provisions would take effect for taxable years beginning after December 31, 2025, and include modifications to allow the deduction for both itemizers and non-itemizers while ensuring it is not subject to certain standard tax limitations. The bill aims to provide stronger financial protections and tax benefits for workers in tip-dependent industries.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/1314/all-info