119-hr482

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 482 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 482

To amend the Internal Revenue Code of 1986 to eliminate the application 
of the income tax on qualified tips through a deduction allowed to all 
 individual taxpayers, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 January 16, 2025

 Mr. Buchanan (for himself, Mr. Donalds, Mr. Van Orden, and Mr. 
 Horsford) introduced the following bill; which was referred to the 
 Committee on Ways and Means

_______________________________________________________________________

 A BILL

To amend the Internal Revenue Code of 1986 to eliminate the application 
of the income tax on qualified tips through a deduction allowed to all 
 individual taxpayers, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``No Tax on Tips Act''.

SEC. 2. DEDUCTION FOR QUALIFIED TIPS.

    (a) In General.--

    (1) Deduction allowed.--Part VII of subchapter B of chapter 
 1 of the Internal Revenue Code of 1986 is amended by 
 redesignating 

section 224 as 

section 225 and by inserting after 
 

section 223 the following new section:

``

SEC. 224. QUALIFIED TIPS.

 ``

    (a) In General.--There shall be allowed as a deduction an amount 
equal to the qualified tips received during the taxable year that are 
included on statements furnished to the employer pursuant to 

section 6053

    (a) .
 ``

    (b) Maximum Deduction.--The deduction allowed by subsection

    (a) for any taxpayer for the taxable year shall not exceed $25,000.
 ``
            (c) Qualified Tips.--For purposes of this section--
 ``

    (1) In general.--The term `qualified tip' means any cash 
 tip received by an individual in the course of such 
 individual's employment in an occupation which traditionally 
 and customarily received tips on or before December 31, 2023, 
 as provided by the Secretary.
 ``

    (2) Exclusion for certain employees.--Such term shall not 
 include any amount received by an individual in the course of 
 employment by an employer if such individual had, for the 
 preceding taxable year, compensation (within the meaning of 
 

section 414

    (q) )

    (4) from such employer in excess of the amount 
 in effect under 

section 414

    (q)

    (1)
        (B)
            (i) .''.

    (2) Published list of occupations traditionally receiving 
 tips.--Not later than 90 days after the date of the enactment 
 of this Act, the Secretary of the Treasury (or the Secretary's 
 delegate) shall publish a list of occupations which 
 traditionally and customarily received tips on or before 
 December 31, 2023, for purposes of 

section 224
            (c) (1) of the 
 Internal Revenue Code of 1986 (as added by paragraph

    (1) ).

    (3) Conforming amendment.--The table of sections for part 
 VII of subchapter B of chapter 1 of such Code is amended by 
 redesignating the item relating to 

section 224 as relating to 
 

section 225 and by inserting after the item relating to 

section 223 the following new item:

``

Sec. 224. Qualified tips.''.

    (b) Deduction Allowed to Non-Itemizers.--

Section 63

    (b) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of paragraph

    (3) , by striking the period at the end of paragraph

    (4) and inserting ``and'', and by adding at the end the following new 
paragraph:
 ``

    (5) the deduction provided in 

section 224.''.
            (c) Non-Application of Certain Limitations for Itemizers.--

    (1) Deduction not treated as a miscellaneous itemized 
 deduction.--

Section 67

    (b) of the Internal Revenue Code of 1986 
 is amended by striking ``and'' at the end of paragraph

    (11) , by 
 striking the period at the end of paragraph

    (12) and inserting 
 ``, and'', and by adding at the end the following new 
 paragraph:
 ``

    (13) the deduction under 

section 224 (relating to 
 qualified tips).''.

    (2) Deduction not taken into account under overall 
 limitation.--

Section 68
            (c) of the Internal Revenue Code of 1986 
 is amended by striking ``and'' at the end of paragraph

    (2) , by 
 striking the period at the end of paragraph

    (3) and inserting 
 ``, and'', and by adding at the end the following new 
 paragraph:
 ``

    (4) the deduction under 

section 224 (relating to 
 qualified tips).''.
            (d) Withholding.--The Secretary of the Treasury (or the Secretary's 
delegate) shall modify the tables and procedures prescribed under 

section 3402

    (a) of the Internal Revenue Code of 1986 to take into 
account the deduction allowed under 

section 224 of such Code (as added 
by this Act).

    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.

SEC. 3. EXTENSION OF CREDIT FOR PORTION OF EMPLOYER SOCIAL SECURITY 
 TAXES PAID WITH RESPECT TO EMPLOYEE TIPS TO BEAUTY 
 SERVICE ESTABLISHMENTS.

    (a) Extension of Tip Credit to Beauty Service Business.--

    (1) In general.--

Section 45B

    (b)

    (2) of the Internal Revenue 
 Code of 1986 is amended to read as follows:
 ``

    (2) Application only to certain lines of business.--In 
 applying paragraph

    (1) there shall be taken into account only 
 tips received from customers or clients in connection with the 
 following services:
 ``
        (A) The providing, delivering, or serving of food 
 or beverages for consumption, if the tipping of 
 employees delivering or serving food or beverages by 
 customers is customary.
 ``
        (B) The providing of beauty services to a 
 customer or client if the tipping of employees 
 providing such services is customary.''.

    (2) Beauty service defined.--

Section 45B of such Code is 
 amended by adding at the end the following new subsection:
 ``

    (e) Beauty Service.--For purposes of this section, the term 
`beauty service' means any of the following:
 ``

    (1) Barbering and hair care.
 ``

    (2) Nail care.
 ``

    (3) Esthetics.
 ``

    (4) Body and spa treatments.''.

    (b) Credit Determined With Respect to Minimum Wage in Effect.--

Section 45B

    (b)

    (1)
        (B) of the Internal Revenue Code of 1986 is amended--

    (1) by striking ``as in effect on January 1, 2007, and''; 
 and

    (2) by inserting ``, and in the case of food or beverage 
 establishments, as in effect on January 1, 2007'' after 
 ``without regard to 

section 3
            (m) of such Act''.
            (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
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