I
119THCONGRESS
1
STSESSION H. R. 558
To amend the Internal Revenue Code of 1986 to provide that certain tips
shall not be subject to income taxes for a period of 5 years.
IN THE HOUSE OF REPRESENTATIVES
JANUARY20, 2025
Mr. B
ACONintroduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
that certain tips shall not be subject to income taxes
for a period of 5 years.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Tip Tax Termination 4
Act’’. 5
SEC. 2. EXCLUSION FROM GROSS INCOME OF CERTAIN 6
TIPPED WAGES. 7
(a) I
NGENERAL.—Part III of subchapter B of chap-8
ter 1 of the Internal Revenue Code of 1986 is amended 9
by inserting after section 139I the following new section: 10
VerDate Sep 11 2014 00:49 Feb 15, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H558.IH H558
kjohnson on DSK7ZCZBW3PROD with $$_JOB 2
•HR 558 IH
‘‘SEC. 139J. CERTAIN TIPPED WAGES. 1
‘‘(a) I
NGENERAL.—Gross income shall not include 2
so much of the eligible tips received by an individual dur-3
ing the taxable year as does not exceed $20,000. 4
‘‘(b) E
LIGIBLETIPS.—For purposes of this section, 5
the term ‘eligible tips’ means amounts received while per-6
forming services which constitute employment in a posi-7
tion which generally relies on tips as part of wages, includ-8
ing cosmetology, hospitality, and food service. 9
‘‘(c) D
ENIAL OFDOUBLEBENEFIT.— 10
‘‘(1) I
N GENERAL.—Except as provided in para-11
graph (2), any amount which is excluded from gross 12
income under this section shall not be taken into ac-13
count in determining any deduction or credit under 14
this chapter. 15
‘‘(2) E
XCEPTION FOR CHILD TAX CREDIT ; 16
EARNED INCOME CREDIT .—The amount excluded 17
from gross income under this section shall be taken 18
into account for purposes of determining the credits 19
under sections 24 and 32. 20
‘‘(d) T
ERMINATION.—This section shall not apply to 21
tips received after December 31, 2029.’’. 22
(b) W
ITHHOLDING.—The Secretary of the Treasury 23
(or the Secretary’s delegate) shall modify the tables and 24
procedures prescribed under section 3402(a) of the Inter-25
nal Revenue Code of 1986 to take into account amounts 26
VerDate Sep 11 2014 00:49 Feb 15, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H558.IH H558
kjohnson on DSK7ZCZBW3PROD with $$_JOB 3
•HR 558 IH
excludible from gross income under section 139J of such 1
Code (as added by this Act). 2
(c) C
LERICALAMENDMENT.—The table of sections 3
for part III of subchapter B of chapter 1 of such Code 4
is amended by inserting after the item relating to section 5
139I the following new item: 6
‘‘Sec. 139J. Certain tipped wages.’’.
(d) EFFECTIVEDATE.—The amendments made by 7
this section shall apply to amounts received after Decem-8
ber 31, 2024. 9
Æ
VerDate Sep 11 2014 00:49 Feb 15, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\H558.IH H558
kjohnson on DSK7ZCZBW3PROD with $$_JOB