[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4621 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 4621

To amend the Internal Revenue Code of 1986 to eliminate the application 
   of the income tax on cash tips through a deduction allowed to all 
                         individual taxpayers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 20, 2024

    Mr. Cruz (for himself, Mr. Daines, Mr. Cramer, and Mr. Scott of 
   Florida) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to eliminate the application 
   of the income tax on cash tips through a deduction allowed to all 
                         individual taxpayers.

    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 CASH 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. CASH TIPS.

    ``There shall be allowed as a deduction an amount equal to the cash 
tips received during the taxable year that are included on statements 
furnished to the employer pursuant to section 6053(a).''.
            (2) 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. Cash 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 cash 
        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 cash 
        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.
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