Tip Tax Termination Act

Summary

Tip Tax Termination Act  This bill excludes from gross income for federal tax purposes up to $20,000 of eligible tips received during the tax year. The bill also requires the Internal Revenue Service to modify the tables and procedures used to withhold federal income tax from wages to take into account eligible tips excluded from gross income.  The bill defines  eligible tips as amounts received while performing services in a position that generally relies on tips as part of wages, including cosmetology, hospitality, and food service. Further, under the bill, the amount of eligible tips excluded from gross income must not be included in determining federal tax deductions or credits, except for purposes of calculating the child tax credit and earned income tax credit. Finally, the exclusion from gross income only applies to eligible tips received before 2030.

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2 official files

• Introduced in House

  Introduced in House · EN · 20 January 2025

  ViewDownloadOpen at official source

• Introduced in House

  summary · EN · 20 January 2025

  Open at official source

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