119th (2025–2027)
H.R. 1314
The TIPS Act would eliminate the separate federal minimum wage for tipped employees, requiring employers to pay tipped workers the same full minimum wage as other workers under the Fair Labor Standards Act. The bill also introduces a new tax deduction allowing workers in tip-based occupations—such as food service, hospitality, cosmetology, and parking attendants—to deduct qualified tips from their taxable income, with the deduction available only to individuals earning under $112,500 annually and only for tips actually reported to employers. The tax deduction would take effect for tax years beginning after December 31, 2025, while the minimum wage change would apply immediately upon enactment. This legislation primarily affects restaurant servers, bartenders, hotel staff, and other tipped workers, and would represent a significant shift in how employers compensate and how workers report tip income to the federal government.