The bills would establish a new tax deduction of up to $25,000 for tip-earners, meaning tips stay where they were intended–as a sign of gratitude for the great service.
The bills would also expand the tax credits to certain businesses that currently owe payroll taxes on tipped income, making some of favorite local spots eligible for relief.
The bills would also expand the tax credits to certain businesses that currently owe payroll taxes on tipped income, making some of favorite local spots eligible for relief.
Local restaurant and bar staff. On average, tips make up 23% of restaurant and bar staff’s annual income. The bills would put tip-earners’ hard-earned money back in their pockets where it belongs.
Average restaurant or bar staff member could save as much as $4,000 per year through the tax deduction and difference in owed federal income taxes.
Most tips go directly into the pocket of local restaurant or bar staff, but a significant portion is taxed and sent to the government–not their personal bank account. Something has to change.
Local businesses currently pay a payroll tax on employees’ income, including the tipped income reported by the employees themselves. The bills would expand the business tax credit eligibility, ultimately reducing the taxes owed by small businesses.
How can I help?
Join Sazerac in support of restaurant and bar staff by contacting your members of Congress and letting them know that you support HR 482 and SB 129, the No Tax on Tips Act.
