The Working for Tips Tax Relief Act of 2025
Congress bill would let many tipped workers deduct up to $35,000 in reported tips from taxes
Stalled
No legislative action in over 90 days.
Legislative Progress
Key Points
- Lets eligible tipped workers deduct reported cash tips from their taxable income, up to $35,000 a year.
- The tax break phases down as income rises and ends for people over $75,000 in income ($150,000 for married couples filing jointly).
- Only tips in jobs that traditionally received tips by the end of 2024 count, and certain higher-paid service fields are excluded.
- To claim it, workers must report the tips and include a Social Security number; married couples generally must file a joint return.
- Treasury must publish a list of eligible tip-based jobs, update withholding rules, and report to Congress on who uses it and its effects.
Impact Analysis
Personal Impact
How this policy affects specific groups of people
Milestones
Referred to the House Committee on Ways and Means.
Introduced in House
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
4 articlesIRS Loosens Rules for Workers to Claim 'No Tax on Tips' Deductions
IRS guidance temporarily eases enforcement of a key restriction in the new tip-deduction law for tax year 2025, potentially expanding eligibility while final regulations are pending.
Who qualifies for 'no tax on tips' and what counts as a tip? Here are the new rules
Explains the Treasury/IRS guidance for the tip-income deduction in the 2025 tax year, what counts as a tip, and who qualifies under federal rules.
'No Tax on Tips' Approved for 2025: What to Know Now
Consumer-facing explainer of the newly enacted tip-income deduction, limitations (e.g., payroll taxes), and who may or may not benefit.
Source Information
Document Type
Congressional Bill
Official Title
The Working for Tips Tax Relief Act of 2025
Data Sources
Sponsor
Analysis generated by AI. Always verify with official sources.