Bill > HR2603

This bill aims to simplify tax reporting and compliance for small businesses in the beauty service industry by making several key modifications to the Internal Revenue Code. The bill extends a tax credit for Social Security taxes paid on employee tips to beauty service establishments, defining beauty services to include barbering, hair care, nail care, esthetics, and body and spa treatments. To qualify for this credit, beauty service businesses must have tip income exceeding 15% of their gross receipts. The bill also introduces a safe harbor provision that protects beauty service employers from IRS tip examinations if they establish educational programs about tip reporting, create procedures for employees to report tip income, comply with tax laws, and maintain employee and income records for at least four calendar years. Additionally, the bill requires businesses that lease space to multiple beauty service providers and receive $600 or more in rental payments to file annual information returns, including details about the rental payments and the individuals receiving them. These provisions are designed to reduce administrative burdens, promote tax compliance, and provide clearer guidelines for beauty service businesses, with most changes taking effect in tax years beginning after December 31, 2024, or 2025, depending on the specific provision.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/2603/all-info