Bill > HR6295

This bill, titled "The Working for Tips Tax Relief Act of 2025," proposes to amend the Internal Revenue Code of 1986 to allow a deduction for "qualified tips," which are cash tips received by individuals in occupations that traditionally and regularly received tips before December 31, 2024, provided these tips are properly reported. This deduction is capped at $35,000 annually and is subject to a reduction based on modified adjusted gross income (MAGI), with no exclusion applying for individuals with MAGI over $75,000 (or $150,000 for joint filers). The bill also mandates that the Secretary of the Treasury review living wage estimates annually to potentially adjust exclusion or eligibility thresholds and requires biennial reports to Congress on the utilization and effects of this exclusion. Importantly, this tax relief is intended as a pilot program, applying to taxable years beginning after December 31, 2024, and expiring at the end of 2026, after which a pilot program will examine the potential for permanent extension. The bill also clarifies that this deduction is available to those who do not itemize their taxes, treats omissions of Social Security numbers related to this deduction as a mathematical error, and excludes amounts eligible for this deduction from qualified business income calculations.

Budget and Finance

https://www.congress.gov/bill/119th-congress/house-bill/6295/all-info