The Working for Tips Tax Relief Act of 2025
To amend the Internal Revenue Code of 1986 to permanently exclude from gross income certain reported tips for workers in eligible service sectors, to better support low- and moderate-income earners, and for other purposes.
The Working for Tips Tax Relief Act of 2025 aims to change how tips are taxed for workers in certain service jobs, like those in restaurants and bars. Specifically, it seeks to permanently exclude certain reported tips from being counted as part of an employee's taxable income. This change is intended to provide more financial support to low- and moderate-income workers who rely on tips as a significant part of their earnings.
This bill would primarily affect workers in eligible service sectors who receive tips as part of their income. By excluding a portion of their reported tips from their gross income, the bill aims to reduce their overall tax burden, potentially leaving them with more money to spend or save. This could be particularly beneficial for those who rely heavily on tips, as it could help alleviate some of the financial pressures they face.
As of the last update on November 25, 2025, the bill has just been introduced in the House and referred to the House Committee on Ways and Means. This means it is in the early stages of the legislative process, and the committee will now review and possibly hold hearings on the bill before it moves forward.
