What is the official ID of this bill?
The official print number for this legislation is HR 8401.
Tax Credit for Restaurants Distributing Service Charges to Non-Management Staff.
This bill offers a new tax credit to restaurant owners who distribute mandatory service charges directly to their non-management employees as wages. The goal is to reduce the employer's Social Security tax burden associated with these payments. For non-management restaurant staff, this formalizes how service charges contribute to their income, potentially leading to a more stable, taxed wage component.
Key points
Employers can claim a Social Security tax credit for service charges paid as wages to non-management employees.
The credit is limited; employers must choose between claiming the credit for traditional tips or for service charges, but not both.
The amount of service charges eligible for the credit cannot exceed 25% of the restaurant's annual gross receipts.
Status:
Expired
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