FROM EPOCH TIMES: The U.S. Treasury Department and IRS on Sept. 19 released details about a provision backed by the Trump administration and Republicans, passed by Congress earlier this year, that would provide a tax break for many employees who receive cash tips.
In a document released on the Federal Register’s website, the agencies outlined what type of jobs and what type of tips are eligible under the new regulations, which were passed as part of the One Big Beautiful Bill Act in July.
It stipulates that people earning a tipped income can deduct as much as $25,000 per year under the measure, instructing the IRS and Treasury Department to find what jobs could qualify. Nearly 70 jobs were eligible for the tax break under guidance that was released earlier this month, while the tax deduction will apply for the tax year 2025, up to Dec. 31 of this year, according to the proposed rules.
“For taxable years beginning after December 31, 2024, and before January 1, 2029, employees and self-employed individuals may deduct qualified tips from their gross income when calculating their Federal income tax liability,” the proposal, uploaded on Friday, stated.
Qualified tips are cash tips received by a person in covered occupations “on or before December 31, 2024, as provided by the Secretary,” according to the proposal.
“The Treasury Department and the IRS consulted data from surveys conducted in years 2017, 2019, and 2023” regarding tips, the proposal states.
“The occupations identified as having customarily and regularly received tips based on this survey data were largely consistent with those identified by the confidential tax return data,” the agencies stated.
The covered occupations include taxi drivers, rideshare drivers, valets, servers, bartenders, hosts and hostesses, chefs, cooks, dishwashers, bellhops, porters, concierges, housekeepers, hotel desk clerks, tour guides, golf caddies, movers, delivery drivers, barbers, digital content creators, casino employees, card dealers, musicians, ushers, locksmiths, repair workers, cleaners, singers, DJs, massage therapists, tattoo artists, bussers, and hairstylists. Others may also be covered.
The draft is open for comment on the Federal Register’s website.
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