The Working for Tips Tax Relief Act of 2025 would allow workers in tip-based occupations to exclude up to $35,000 in reported tips annually from their taxable income, providing tax relief to service sector workers like servers, bartenders, and taxi drivers. The exclusion begins phasing out for single filers with adjusted gross income between $50,000 and $75,000 (and joint filers between $100,000 and $150,000), with no benefit available for those exceeding these thresholds. The bill applies to taxable years beginning after December 31, 2025, and currently expires after December 31, 2028, though the legislation directs the Treasury Department to conduct a pilot program afterward to evaluate making the provision permanent. The Treasury must publish a list of qualifying tip-receiving occupations within 90 days and submit biennial reports to Congress assessing the program's impact on workforce participation and wage equity. The bill includes safeguards against income reclassification abuse and requires taxpayers to provide their Social Security numbers to claim the deduction.
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