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Tax Deduction for Tips and Expanded Employer Credits

This act introduces a new tax deduction for individuals receiving tips, allowing them to deduct up to $25,000 annually from their taxable income. Additionally, it expands the tax credit for employers paying social security taxes on employee tips to include the beauty service industry, potentially leading to lower service costs or better employment conditions in these sectors.
Key points
Individuals receiving tips can deduct up to $25,000 annually from their income, resulting in lower taxes.
The deduction applies to tips received in occupations that traditionally received tips before December 31, 2023, and a list of these occupations will be published.
Employers in the beauty service industry (barbering, nail care, esthetics, spa treatments) will also be able to claim a tax credit for social security taxes paid on employee tips.
These changes take effect for tax years beginning after December 31, 2024.
article Official text account_balance Process page
Introduced
Citizen Poll
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Additional Information
Print number: 119_HR_482
Sponsor: Rep. Buchanan, Vern [R-FL-16]
Process start date: 2025-01-16
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Summarized by: gemini-2.5-flash
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

No Tax on Tips Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_482.

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 2025-01-16.

What are the main provisions?

Key points include:

  • Individuals receiving tips can deduct up to $25,000 annually from their income, resulting in lower taxes.
  • The deduction applies to tips received in occupations that traditionally received tips before December 31, 2023, and a list of these occupations will be published.
  • Employers in the beauty service industry (barbering, nail care, esthetics, spa treatments) will also be able to claim a tax credit for social security taxes paid on employee tips.
  • These changes take effect for tax years beginning after December 31, 2024.
What is the specific legal status?

The current status is Introduced.

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. Buchanan, Vern [R-FL-16].

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 2025-12-23.

CATEGORIES

Taxes Labor