2025 Tax Legislation – No Income on Tips
Term Limits of 01/01/25 – 12/31/28
1. Creates an above line deduction for qualified tips Voluntarily
received.
2. To qualify the tip must e paid voluntarily and must be
determined by the payor.
3. The deduction is allowed for employees receiving a W-2,
independent contractors receiving a 1099-K or 1099-Nec, or
reported by taxpayer on Form 4317.
4. For those tips received in a business, the deduction is limited to
the amount of gross income received.
5. Phaseout begins at !0% rate with modified adjusted gross income
over $150,000 singe, and $300,00 married filing jointly.
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