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Tax Free Tips Act: Eliminating Income and Employment Taxes on Gratuities

This bill amends the Internal Revenue Code of 1986 to provide that tips shall not be subject to income or employment taxes. Under the bill, tips are to be treated as property transferred by gift. The legislation also repeals sections regarding tip reporting by employers and employees and excludes tips from the definition of wages for Social Security, Medicare, and unemployment tax purposes.
Key points
Tips are excluded from federal income tax and will be treated as gifts.
Tips are excluded from Social Security, Medicare, and Railroad Retirement taxes.
The bill repeals Section 6053 regarding tip reporting and associated penalties for failure to report.
Tips are defined to include any gratuity provided to a salaried employee by a customer or client of the employer's business.
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Expired
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Additional Information
Print number: 118_HR_8785
Sponsor: Rep. Massie, Thomas [R-KY-4]
Process start date: 2024-06-18
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Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Tax Free Tips Act of 2024

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 118_HR_8785.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2024-06-18.

What are the main provisions?

Key points include:

  • Tips are excluded from federal income tax and will be treated as gifts.
  • Tips are excluded from Social Security, Medicare, and Railroad Retirement taxes.
  • The bill repeals Section 6053 regarding tip reporting and associated penalties for failure to report.
  • Tips are defined to include any gratuity provided to a salaried employee by a customer or client of the employer's business.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Massie, Thomas [R-KY-4].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-30.

CATEGORIES

Taxes Labor Benefits