Us Congress 2025-2026 Regular Session

Us Congress Senate Bill SB129 Compare Versions

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Old	New	Differences
1	1	II
2	2	119THCONGRESS
3	3	1
4	4	STSESSION S. 129
5	5	To amend the Internal Revenue Code of 1986 to eliminate the application
6	6	of the income tax on qualified tips through a deduction allowed to
7	7	all individual taxpayers, and for other purposes.
8	8	IN THE SENATE OF THE UNITED STATES
9	9	JANUARY16, 2025
10	10	Mr. C
11	11	RUZ(for himself, Mr. DAINES, Ms. ROSEN, Mr. RICKETTS, Ms. CORTEZ
12	12	M
13	13	ASTO, Mr. HAWLEY, Mr. SCOTTof Florida, and Mr. CRAMER) intro-
14	14	duced the following bill; which was read twice and referred to the Com-
15	15	mittee on Finance
16	16	A BILL
17	17	To amend the Internal Revenue Code of 1986 to eliminate
18	18	the application of the income tax on qualified tips
19	19	through a deduction allowed to all individual taxpayers,
20	20	and for other purposes.
21	21	Be it enacted by the Senate and House of Representa-1
22	22	tives of the United States of America in Congress assembled, 2
23	23	SECTION 1. SHORT TITLE. 3
24	24	This Act may be cited as the ‘‘No Tax on Tips Act’’. 4
25	25	SEC. 2. DEDUCTION FOR QUALIFIED TIPS. 5
26	26	(a) I
27	27	NGENERAL.— 6
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30	30	•S 129 IS
31	31	(1) DEDUCTION ALLOWED .—Part VII of sub-1
32	32	chapter B of chapter 1 of the Internal Revenue Code 2
33	33	of 1986 is amended by redesignating section 224 as 3
34	34	section 225 and by inserting after section 223 the 4
35	35	following new section: 5
36	36	‘‘SEC. 224. QUALIFIED TIPS. 6
37	37	‘‘(a) I
38	38	NGENERAL.—There shall be allowed as a de-7
39	39	duction an amount equal to the qualified tips received dur-8
40	40	ing the taxable year that are included on statements fur-9
41	41	nished to the employer pursuant to section 6053(a). 10
42	42	‘‘(b) M
43	43	AXIMUMDEDUCTION.—The deduction allowed 11
44	44	by subsection (a) for any taxpayer for the taxable year 12
45	45	shall not exceed $25,000. 13
46	46	‘‘(c) Q
47	47	UALIFIEDTIPS.—For purposes of this sec-14
48	48	tion— 15
49	49	‘‘(1) I
50	50	N GENERAL.—The term ‘qualified tip’ 16
51	51	means any cash tip received by an individual in the 17
52	52	course of such individual’s employment in an occu-18
53	53	pation which traditionally and customarily received 19
54	54	tips on or before December 31, 2023, as provided by 20
55	55	the Secretary. 21
56	56	‘‘(2) E
57	57	XCLUSION FOR CERTAIN EMPLOYEES .— 22
58	58	Such term shall not include any amount received by 23
59	59	an individual in the course of employment by an em-24
60	60	ployer if such individual had, for the preceding tax-25
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63	63	•S 129 IS
64	64	able year, compensation (within the meaning of sec-1
65	65	tion 414(q))(4) from such employer in excess of the 2
66	66	amount in effect under section 414(q)(1)(B)(i).’’. 3
67	67	(2) P
68	68	UBLISHED LIST OF OCCUPATIONS TRADI -4
69	69	TIONALLY RECEIVING TIPS.—Not later than 90 days 5
70	70	after the date of the enactment of this Act, the Sec-6
71	71	retary of the Treasury (or the Secretary’s delegate) 7
72	72	shall publish a list of occupations which traditionally 8
73	73	and customarily received tips on or before December 9
74	74	31, 2023, for purposes of section 224(c)(1) of the 10
75	75	Internal Revenue Code of 1986 (as added by para-11
76	76	graph (1)). 12
77	77	(3) C
78	78	ONFORMING AMENDMENT .—The table of 13
79	79	sections for part VII of subchapter B of chapter 1 14
80	80	of such Code is amended by redesignating the item 15
81	81	relating to section 224 as relating to section 225 16
82	82	and by inserting after the item relating to section 17
83	83	223 the following new item: 18
84	84	‘‘Sec. 224. Qualified tips.’’.
85	85	(b) DEDUCTIONALLOWED TO NON-ITEMIZERS.— 19
86	86	Section 63(b) of the Internal Revenue Code of 1986 is 20
87	87	amended by striking ‘‘and’’ at the end of paragraph (3), 21
88	88	by striking the period at the end of paragraph (4) and 22
89	89	inserting ‘‘and’’, and by adding at the end the following 23
90	90	new paragraph: 24
91	91	‘‘(5) the deduction provided in section 224.’’. 25
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94	94	•S 129 IS
95	95	(c) NON-APPLICATION OF CERTAINLIMITATIONS 1
96	96	FORITEMIZERS.— 2
97	97	(1) D
98	98	EDUCTION NOT TREATED AS A MISCELLA -3
99	99	NEOUS ITEMIZED DEDUCTION .—Section 67(b) of the 4
100	100	Internal Revenue Code of 1986 is amended by strik-5
101	101	ing ‘‘and’’ at the end of paragraph (11), by striking 6
102	102	the period at the end of paragraph (12) and insert-7
103	103	ing ‘‘, and’’, and by adding at the end the following 8
104	104	new paragraph: 9
105	105	‘‘(13) the deduction under section 224 (relating 10
106	106	to qualified tips).’’. 11
107	107	(2) D
108	108	EDUCTION NOT TAKEN INTO ACCOUNT 12
109	109	UNDER OVERALL LIMITATION .—Section 68(c) of the 13
110	110	Internal Revenue Code of 1986 is amended by strik-14
111	111	ing ‘‘and’’ at the end of paragraph (2), by striking 15
112	112	the period at the end of paragraph (3) and inserting 16
113	113	‘‘, and’’, and by adding at the end the following new 17
114	114	paragraph: 18
115	115	‘‘(4) the deduction under section 224 (relating 19
116	116	to qualified tips).’’. 20
117	117	(d) W
118	118	ITHHOLDING.—The Secretary of the Treasury 21
119	119	(or the Secretary’s delegate) shall modify the tables and 22
120	120	procedures prescribed under section 3402(a) of the Inter-23
121	121	nal Revenue Code of 1986 to take into account the deduc-24
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124	124	•S 129 IS
125	125	tion allowed under section 224 of such Code (as added 1
126	126	by this Act). 2
127	127	(e) E
128	128	FFECTIVEDATE.—The amendments made by 3
129	129	this section shall apply to taxable years beginning after 4
130	130	December 31, 2024. 5
131	131	SEC. 3. EXTENSION OF CREDIT FOR PORTION OF EM-6
132	132	PLOYER SOCIAL SECURITY TAXES PAID WITH 7
133	133	RESPECT TO EMPLOYEE TIPS TO BEAUTY 8
134	134	SERVICE ESTABLISHMENTS. 9
135	135	(a) E
136	136	XTENSION OFTIPCREDIT TOBEAUTYSERVICE 10
137	137	B
138	138	USINESS.— 11
139	139	(1) I
140	140	N GENERAL.—Section 45B(b)(2) of the In-12
141	141	ternal Revenue Code of 1986 is amended to read as 13
142	142	follows: 14
143	143	‘‘(2) A
144	144	PPLICATION ONLY TO CERTAIN LINES OF 15
145	145	BUSINESS.—In applying paragraph (1) there shall 16
146	146	be taken into account only tips received from cus-17
147	147	tomers or clients in connection with the following 18
148	148	services: 19
149	149	‘‘(A) The providing, delivering, or serving 20
150	150	of food or beverages for consumption, if the tip-21
151	151	ping of employees delivering or serving food or 22
152	152	beverages by customers is customary. 23
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156	156	‘‘(B) The providing of beauty services to a 1
157	157	customer or client if the tipping of employees 2
158	158	providing such services is customary.’’. 3
159	159	(2) B
160	160	EAUTY SERVICE DEFINED .—Section 45B 4
161	161	of such Code is amended by adding at the end the 5
162	162	following new subsection: 6
163	163	‘‘(e) B
164	164	EAUTYSERVICE.—For purposes of this sec-7
165	165	tion, the term ‘beauty service’ means any of the following: 8
166	166	‘‘(1) Barbering and hair care. 9
167	167	‘‘(2) Nail care. 10
168	168	‘‘(3) Esthetics. 11
169	169	‘‘(4) Body and spa treatments.’’. 12
170	170	(b) C
171	171	REDITDETERMINEDWITHRESPECT TOMIN-13
172	172	IMUMWAGE INEFFECT.—Section 45B(b)(1)(B) of the 14
173	173	Internal Revenue Code of 1986 is amended— 15
174	174	(1) by striking ‘‘as in effect on January 1, 16
175	175	2007, and’’; and 17
176	176	(2) by inserting ‘‘, and in the case of food or 18
177	177	beverage establishments, as in effect on January 1, 19
178	178	2007’’ after ‘‘without regard to section 3(m) of such 20
179	179	Act’’. 21
180	180	(c) E
181	181	FFECTIVEDATE.—The amendments made by 22
182	182	this section shall apply to taxable years beginning after 23
183	183	December 31, 2024. 24
184	184	Æ
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